Hospital chain operator and the recently listed player Jupiter Life Line Hospitals will be in focus as brokerage firm Nuvama has initiated coverage on the stock. Nuvama has initiated coverage with a Buy rating on Jupiter Life Line Hospitals stock and expects a 30% upside in the share price from the CMP. Nuvama has a target price of Rs 1,585 for shares of Jupiter Life Line Hospitals, which implies a 30.4% upside from the current stock price of Rs 1,215.
Jupiter Life Line Hospitals (Jupiter) operates three quaternary care hospitals in densely populated, under-served and growing micro-markets of West India—Thane, Pune and Indore. Modelled as an ‘all-hub–no-spoke’, the company has operational bed capacity of 961 (end-Dec-23), and is on track to double capacity in five years via two 500-bed hospitals. Jupiter owns the land that its hospitals are built on.
“West India, Jupiter’s stronghold, is outgrowing the overall health care delivery market. For Jupiter, we forecast a revenue/EBITDA CAGR of 15%/21% over FY24–26E with a healthy RoCE of 20% in FY26E despite greenfield expansion. Initiating coverage at ‘BUY’ with an SoTP-based TP of INR1,585,” said Nuvama in its note.
The brokerage has also highlighted the key risks, namely regulatory issues, doctor attrition and increased competition.