Indium Hospital Valuation Update - August 2024

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 Hospitals Index – IHX) have grown by ~123% in the last 2 years (vs. BSE Sensex at ~46%) – see Charts 1 & 2
• There has been a healthy growth in Revenue and EBITDA for all Listed Hospitals – ~16% CAGR in combined Revenue and ~21% CAGR in combined EBITDA over last 2 years – see Charts 3 & 4
• There was a net addition of ~3,000 beds by all Listed Hospitals in the last 2 years (~4% CAGR) driven largely by Aster DM (832), Max (548), Medanta (356), KIMS Hyderabad (281) and Rainbow (277) – see Chart 5
• Overall average EV/EBITDA & EV/Bed multiples are at ~28x and ~Rs 7cr/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)

• Combined Revenue of all Listed Hospitals has grown ~30% over the last 2 years (~16% CAGR over 2 years)
• Higher growth in combined EBITDA at ~21% CAGR over 2 years
• ~3,000 new beds were added (CAGR: ~4%) in the last 2 years via a mix of organic and inorganic expansion

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

Overall valuation multiples of Listed Hospitals have grown to ~28x EV/EBITDA and ~Rs 7cr EV/Bed and the multiples are at all-time highs today

• High-ARPOBn (Rs 55-80k)?hospitals (Apollo, Max, Fortis, Medanta,?Rainbow, Jupiter and Artemis): ~35x EV/EBITDA and ~Rs 11cr EV/Bed
• Mid-ARPOBn (Rs 20-45k) hospitals (Narayana, KIMS Hyderabad, Aster DM, HCG, Kovai, Shalby and Yatharth): ~21x EV/EBITDA and ~Rs 3-4cr 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.