Jupiter Life Line Hospitals Ltd. is among the key multi-specialty tertiary and quaternary healthcare providers in the Mumbai Metropolitan Area and western region of India, with a total bed capacity of 1,194 hospital beds across three hospitals as of March 31, 2023. The company has been operating for over 15 years as a corporate quaternary care healthcare service provider in densely populated micro markets in the western regions of India and currently operates three hospitals under the Jupiter brand in Thane, Pune and Indore, with an operational bed capacity of 961 beds and 1,306 doctors including specialists, physicians and surgeons, as of FY23. The company functions on an all-hub-no-spoke model, with each hospital being a full-service hospital, operating independently and serving the healthcare needs of patients, right from diagnostics to surgery and rehabilitation. Jupiter Life Line Hospitals Ltd. is also expanding its presence in developing a multi-specialty hospital in Dombivli, Maharashtra, which is designed to accommodate over 500 beds and has commenced construction in April 2023.
Objects of the issue:
The net proceeds from the fresh issue will be used towards the following purposes:
- To Repayment, in full or part, of borrowings availed from banks by the company and Material Subsidiary.
- General Corporate Purposes
Investment Rationale:
Well-established presence in multi-specialty tertiary and quaternary healthcare, with strong brand recognition
The company is a corporate quaternary care hospital located in densely populated micro markets in the western region of India. According to the CRISIL Report, it is among the growing critical multi-speciality tertiary and quaternary healthcare providers in the Mumbai Metropolitan Area (MMR) and western region of India with a total bed capacity of 1,194 hospital beds across three hospitals as of FY23. They serve the healthcare needs of their patients, and their hospitals are equipped with over 30 key specialities, including crucial specialities of organ transplant, oncology, orthopaedics, cardiology, paediatrics, neurology and neurosurgery as well as certain specialised quaternary services and precision-based treatments such as brachytherapy, radiotherapy, robotic knee replacement and robotic neurorehabilitation. The company’s Thane and Indore hospitals are among the few hospitals in the western region of India to provide neurorehabilitation services through a dedicated automated and computer-assisted neurorehabilitation centre.
Function on an all-hub-no-spoke model with a patient-first ideology, further aided by modern infrastructure and technological capabilities
Jupiter Life Line’s each of the three hospitals is a full-service hospital operating on an ‘all-hub-no-spoke’ model where each hospital is independent, individually well-equipped with skilled healthcare professionals as well as advanced infrastructure to serve the healthcare needs of the patients, right from diagnostics to surgery and rehabilitation. The company has constructed their greenfield hospitals at Thane and Pune and designed its Indore hospital in line with its patient-first ideology, primarily focusing on patient care, comfort, privacy and dignity. Further, the company believes that its centric approach, supported by modern infrastructure and technological capabilities, has improved its operational efficiency and enhanced patients’ experience. They are also determined to provide healthcare services with high integrity and do not set any incentives that could compromise the quality of their services such as financial targets for doctors.
Valuation and Outlook:
Jupiter Life Line Hospitals has been operating for over 15 years as a corporate quaternary care healthcare service provider in densely populated micro markets in the western regions of India and currently operates three hospitals under the Jupiter brand in Thane, Pune and Indore, with an operational bed capacity of 961 beds, as of March 31, 2023. The company follows a patient-first ideology by creating the best infrastructure, technology and support to put the patient first and foremost and be futuristic and innovative in healthcare delivery. The company now intends to improve hospital occupancy rates and equipment utilization by continuing to maintain and recruit new medical professionals of high caliber in specified fields and focus on clinical excellence. Further, the company has a track record of sustained revenue growth, growing at a CAGR of 35.5% during the FY21-23 period. With strong operational efficiency, Jupiter Life Line Hospitals has demonstrated good financial performance among peers. Further, the growth in the healthcare segment with robust financial performance and expansion to new areas will drive the company’s performance going ahead. On the upper price band, the issue is valued at a P/E of 52.7x based on FY2023 earnings, which we feel is fairly valued compared to its peers. We, therefore, recommend an SUBSCRIBE rating for the issue.
