MEDANTA - Global Health Limited Share Price

The management of Global Health Limited provided an optimistic outlook for the future during the Q4 FY25 earnings conference call, emphasizing their commitment to expanding healthcare services and infrastructure. Key forward-looking points include:

1. Bed Capacity Expansion: Management plans to add approximately 1,000 beds over the next 2 years, with particular focus on the Noida facility, which will have a capacity of 550 beds and is set to become operational in Q2 FY26.

2. New Hospital Projects: The company announced the establishment of three large-format greenfield hospitals in Mumbai, Pitampura, and Guwahati, enhancing access to high-quality tertiary care in high-growth regions.

3. Financial Performance: For the fiscal year 2025, total consolidated income reached INR 37,714 million with a 13% year-on-year growth. EBITDA rose to INR 9,562 million, a 9% increase, resulting in a strong EBITDA margin of 25.4%. Profit after tax stood at INR 4,813 million, with an adjusted profit after tax of INR 5,186 million (up 9%).

4. Future Capex Plans: The company has earmarked a total capital expenditure of around INR 4,000 crores to support the expansion, which includes capacity additions, technology upgrades, and the construction of new facilities over the next few years.

5. Strong Cash Position: Global Health ended the fiscal year with a net cash surplus of INR 8,123 million, which positions them well to pursue their growth plans.

6. Quality Commitment: They continue to invest in modern technology and skilled clinicians, ensuring high standards of patient care and advanced treatment options, such as CAR-T cell therapies and robotic surgeries.

Overall, management is confident that these initiatives will drive sustained growth and enhance their competitive positioning in the healthcare sector.

Major Questions and Answers from the Q&A Section:

1. Question: "Could you please repeat the capex numbers? I just missed out on the total capex for the beds. Did you say INR 4,000 crores?"

Answer: "Yes, I said INR 4,000 crores."

2. Question: "Could you give a sense of how many transplants have been done in this quarter and in FY25, and how have those grown on a year-on-year basis?"

Answer: "I don't have the exact number on hand, but it's worth noting we crossed 250 kidney transplants at Lucknow. We perform various types of transplants in Gurugram, Lucknow, and Patna, but for specific numbers, our Investor Relations team will provide further details."

3. Question: "How are you seeing the competitive intensity across your major markets?"

Answer: "There's been an increase in competition from various players expanding into our markets. However, it largely benefits the industry by enhancing standards. Gurgaon has evolved into a medical hub, attracting talent and patients, which lifts all players. We believe this trend will positively affect Lucknow and Kanpur too."

4. Question: "Should we assume Lucknow and Patna will mostly remain cash-heavy regarding payer mix?"

Answer: "Yes, about 90% of our payer mix in Lucknow and Patna comes from cash plus TPA, with only a small share from schemes. We aim to serve those patients gradually, without drastically altering our cash payer focus."

5. Question: "What are your ARPOB growth expectations?"

Answer: "We plan to implement tariff hikes selectively to cover inflationary costs. Historically, ARPOB growth is expected to remain in the low to mid-single digits, similar to pre-pandemic levels."

6. Question: "What's the capex projected for the Pitampura unit?"

Answer: "The capex for Pitampura is INR 600 crores, and it's our portion due to our joint venture structure. This will be backloaded as most expenses arise post-construction."

7. Question: "What's the census bed count in our developing hospital units?"

Answer: "We have about 600 beds in Lucknow and 320 in Patna, totaling roughly 930 census beds across our developing hospitals."

8. Question: "Will you be sharing revenues or rentals in the DLF and Pitampura projects?"

Answer: "Yes, both will involve revenue-sharing agreements or rentals, depending on the commercial arrangements with the landowners."

9. Question: "What impact did Mahakumbh have on operations?"

Answer: "While Mahakumbh generated some patient influx, it generally leads to a dip in elective surgeries. We observed such impacts in previous festivals and believe it likely negatively affected this quarter's elective procedures."

10. Question: "Why was the gross margin for matured hospitals down?"

Answer: "Margins fluctuated based on specialty mix affecting costs. Year-on-year, EBITDA margins were stable at around 24.5%, so minor variances occur, especially with increased clinician costs. Full-year data provides a clearer picture compared to quarterly variations."