Indium Healthcare Valuation Update - December 2023

Welcome to Indium Capital’s Quarterly update on Hospital Valuations in India. The key highlights are summarized below.

Please click here for the complete analysis

Hospital Valuation Trends - Executive Summary

• Indian hospital valuations (tracked via Indium Healthcare Index - IHX) have grown by ~82% in the last 2 years (~62% in the last 12 months) – see Charts 1 & 2
• Combined Revenue and EBITDA of all Listed Hospitals have grown significantly in Q2 FY24 over Q1 (Revenue by ~9% and EBITDA by ~17%) – see Charts 3 & 4
• There was a net addition of ~3,000 beds in the last 2 years (~2,574 beds added in FY23) – see Chart 5
• Overall average EV/EBITDA & EV/Bed multiples are at ~25x and Rs 6Cr/bed, however, there is a wide variation in multiples across hospitals – see Chart 6 & 7

IHX stock-wise 2-year market cap performance (Chart 1)

IHX stock-wise 1-year market cap performance (Chart 2)

Overall Hospitals’ Financial & Operating Performance in the last 2 years (Chart 3, 4 & 5)

• Revenue of all Listed Hospitals*?has grown significantly in the current quarter: ~9% over Q1 FY24?(~17% CAGR over 2 years)
• EBITDA had a significant growth in Q2 FY24 after a fall in Q1 FY24:?~17% over Q1 FY24?(~13% CAGR over 2 years)
• ~3,000 new beds were added (~8% net increase) in the last 2 years via a mix of organic and inorganic expansion

Hospital Valuation Trends - All Listed Hospitals (Chart 6 & 7)

Overall average EV/EBITDA is ~25x & EV/Bed is ~Rs 6cr/bed, with a wide variation across individual hospitals

• High-ARPOBn (Rs 50-75k)?hospitals (Apollo, Max, Fortis, Medanta,?Rainbow, Jupiter and Artemis): ~31x EV/EBITDA and ~Rs 9Cr EV/Bed
• Mid-ARPOBn (Rs 25-40k)?hospitals (Narayana, KIMS Hyderabad, Aster DM, HCG, Kovai, Shalby and Yatharth): ~19x EV/EBITDA and ~Rs 3Cr EV/Bed

Disclaimer: Indium Capital Advisors (ICA) is an investment banking advisory firm based out of Bangalore. The information provided in this article is derived from publicly available data. ICA does not guarantee the accuracy and completeness of the data presented in this article. ICA or any of its connected persons including its directors or subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained, views and opinions expressed in this article. The information and commentaries in this article must not be construed as an investment recommendation/endorsement or solicitation of an offer to buy/sell any securities. This article is purely for educational and informational use only.