Medanta Q4FY25 Update: Solid Performance and Expansion Plans on Track

Global Health (Medanta) continues to inspire confidence as it delivers a strong show in Q4FY25. The hospital chain has seen commendable results across both mature and new facilities, setting the tone for growth over the coming years. Here’s a quick breakdown of how things stand—and what’s ahead.

The Story Behind the Recent Results

• A fine performance in Q4FY25 across mature and new hospitals.
  
• Corrective measures at Lucknow yielded results, as the unit sustains its upward trajectory.
  
• Patna continues to surprise positively; we expect further scope for profitable growth.
  
• Margins to take a hit in FY26E due to the upcoming Noida facility, but expect steady improvement in FY27E.
  
• Expect margin ramp-up in existing hospitals to partially offset the hit due to upcoming beds, driving a healthy EBITDA CAGR of ~18% over FY25–28E.
  
• Retain ADD
  

Positives from the Quarter

• Posted Q4FY25 sales of ₹930 crore, up 15% YoY and down 1% QoQ, beating estimates by 5%.
• The GK facility in South Delhi with DLF is now firmly back on track.
• Expect a steady outlook in mature hospitals & improving visibility in Lucknow and Patna.
• A strong brand, excellent doctor engagement, and a high upcountry mix are expected to keep Medanta in good stead.
• Medanta will be doubling its capacity to ~6,100 beds over the next 3.0–3.5 years.

Risks and Negatives

Every growth story comes with a few caveats. Here’s what to watch for:

• A drag is expected from the upcoming new hospitals at Noida and Ranchi.
• There is risk of slower-than-expected offtake in the newly added beds.

EBITDA Growth Outlook

Medanta’s strategic moves and operational improvements are projected to deliver an ~18% CAGR in EBITDA over FY25–28E.

Analyst’s View: Retain ADD

Given the balanced view of upside from capacity expansion and brand strength, and downside risks from margin pressure and new hospital offtake, we maintain an ADD stance with a fair value (FV) of ₹1,275.