Jeena Sikho Lifecare share price has seen a bull run over the past year, yielding significant multibagger gains. Domestic brokerage Nuvama Professional Clients Group initiated coverage on the stock with a ‘BUY’ rating and a target price of ₹1,650. The brokerage sees an upside of 47%, and recommends the stock from a long term perspective.
Jeena Sikho Lifecare share price has shot up by almost 88% in 2024 thus far. According to Trendlyne data, the stock has surged by 1,315.52% since its listing on April 19, 2022 and by 539.22% in the last year alone.
Based on an increase in hospital occupancy to roughly 53% in the next two years from approximately 30% in FY23, an expansion of hospital beds to nearly 2,000 in FY26E from about 1,300 in FY24, an increase in average revenue per occupied bed (ARPOB) due to a higher frequency of three-day wellness camps, and a growth in its product basket with a focus on over-the-counter (OTC) products, the brokerage estimates a revenue/PAT CAGR of ~41%/~60% over FY23–26.
In North, East, West, and Central India, Jeena Sikho Lifecare has made a solid presence for itself, and it intends to expand into the South, according to Nuvama’s report. In FY20, it had 55 beds in a single hospital; by March 2024, it had increased to almost 1,300 beds (27 Panchakarma hospitals and 30 daycare clinics). In FY23, its 1,285 beds had an average occupancy of about 35%. The goal set by the management is to increase the number of beds to about 2,000 by FY26 and to improve the occupancy of the current beds by up to 55% over the following two years.
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One of India’s top Ayurvedic healthcare organisations, Jeena Sikho Lifecare was founded in 2017 by Manish Grover, also known as Acharya Manishji. Since 2009, Manish has promoted goods and services related to Ayurveda. Jeena Sikho Lifecare is ideally positioned to take advantage of the opportunities for healthy growth presented by Ayurveda, yoga, naturopathy, unani, siddha, and homoeopathy (AYUSH).
The majority of hospitals, according to the research, are leased for an extended period of time, and the organisation uses an asset-light business strategy. It is predicted to produce an Free cash flow (FCF) of ₹293 crore over FY24–26E and is debt-free. It can maintain healthy return ratios as a result. It is anticipated that the ex-cash return on capital employed (RoCE) will rise from 66% in FY23 to 82%, 95%, and 104% in FY24E, FY25E, and FY26E.
Valuation and view
“A conducive environment, promoter repute, strong execution, and a healthy Balance Sheet are some of the factors that instil confidence in the company. The management’s focus is on improving occupancy in existing hospitals, setting up hospitals, and scaling up product sales through organic and inorganic means. It is eyeing acquisitions in the OTC product space. We expect a revenue/PAT CAGR of 41%/60% over FY23–26. The stock is trading at 40x/27x/20x FY24E/FY25E/FY26E EPS. We assign a P/E ratio of 30x on FY26 earnings to arrive at our target price of ₹1,650, ” the brokerage said.
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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 20 May 2024, 09:55 AM IST
