Shares of Jupiter Life Line Hospitals made a strong debut on the bourses today, September 18. The stock listed at ₹973 on the NSE, a 32.3 percent premium to the issue price of ₹735. Meanwhile, on the BSE, it listed at ₹960, a 30.6 percent premium.
During the day, the stock extended gains to hit its intra-day high of ₹1108.95, an almost 51 percent premium to its IPO price.
According to experts, fair valuations, decent return ratios and margins, and favourable risk-reward ratios led to a strong listing. Also, the advantage of regional dominance and operational efficiency added to the positive sentiment.
"JLHL is a well-established multi-specialty healthcare provider in the western region of India, and it is planning to expand its operations in the future. The IPO was well-received by investors, with the issue being subscribed 64.8 times which led to such a good listing gain. Investors who participated in the IPO can now book profit while those who want to hold it long term may maintain a stop loss at around 875," Anubhuti Mishra, Equity Research Analyst at Swastika Investmart advised.
Similarly, post the robust listing, brokerage house Ventura Securities advised investors to buy the stock at ₹1,000 for a target price of ₹1,185 in 24 months, indicating an 18.5 percent upside.
Jupiter Life Line Hospitals Ltd (JLHL) is a predominantly Western Bharat-focused healthcare services provider. It currently has three quaternary care hospital facilities whose total operational bed capacity in FY26 is expected to scale to 1,150 beds (Thane- 366 beds, Pune- 353 beds, Indore- 431 beds). In April 2023, JLHL undertook the construction of a new 500-bed facility at Dombivali, MMR. This hospital, which is expected to be operational by FY26, is to be funded through internal accruals. Recently JLHL raised ₹542 crore, part of which would be used to retire its ₹501 crore debt in entirety while the remaining would be used for general corporate purposes, said the brokerage.
Over the period FY23-26E, the brokerage expects JLHL’s revenue to grow at a CAGR of 13.5 percent to ₹1,304 crore by FY26 driven by:
• Indore facility revenues scaling to ₹286 crore (39.67 percent CAGR) on the back of stable occupancies despite the increase in operational bed capacity to 431 beds from the current 231 beds.
• Pune facility revenues ramping up to ₹425 crore (11.8 percent CAGR) on the back of improving occupancies to 75 percent (+755 bps) and improvement in ARPOB to ₹59,461 from ₹48,996.
• Thane facility experiencing mature growth of 6.9 percent to ₹592 crore (77 percent occupancy, ₹66,284 ARPOB).
• It expects the Dombivali facility to be commissioned in Q4FY26 and the full-fledged effect will accrue post-FY27.
The brokerage expects EBITDA and PAT to grow at a CAGR of 13.8 percent and 38.3 percent to ₹296 crore and ₹193 crore, respectively, while EBITDA/PAT margins are estimated to improve by 10 bps and 660 bps to 22.7 percent and 14.8 percent. PAT margins are expected to expand substantially as the company is going debt-free post-IPO and thus will save up on interest costs. Also, company’s tax rate is expected to decrease to 25.2 percent from the current 43 percent rate. Subsequently, RoE is expected to compress by 630 bps to 13.7 percent and RoIC is expected to improve by 390 bps to 27 percent by FY26, it forecasted.
Bull and Bear Case Scenarios
The brokerage has also prepared likely Bull and Bear case scenarios for FY26 price, based on revenue growth, net margins and P/E multiples.
Bull Case: It has assumed revenue of ₹1,400 crore (FY23-26 CAGR growth of 16.2 percent) and an EBITDA margin of 23 percent at a P/E of 42x, which will result in a Bull Case consolidated price target of ₹1,338 (an upside of 33.8 percent from CMP).
Bear Case: It has assumed revenue of ₹1,200 crore (FY23-26 CAGR growth of 10.4 percent) and an EBITDA margin of 18 percent at a P/E of 38x, which will result in a Bear Case consolidated price target of ₹831 (a downside of 16.9 percent from CMP).
About the IPO
The ₹869.08 crore IPO was open for subscription between September 6 and September 8 at a price band in the range of ₹695-735 per share.
The issue was overall subscribed to 64.80 times with the portion for qualified institutional bidders (QIBs) booked the most, 181.89 times. Meanwhile, the non-institutional investors' category was subscribed to 36 times and the quota reserved for retail investors was subscribed to only 8 times during the three-day bidding process.
The IPO comprised of a fresh issue of 73.74 lakh shares worth ₹542 crore and an offer sale of 44.5 lakh equity shares by promoter group entities and other shareholders worth ₹327.08 crore.
For the financial year FY23, the company's net profit rose 42.6 percent to ₹72.9 crore while its revenue from operations grew 21.7 percent to ₹892.5 crore. Meanwhile, its EBITDA (earnings before interest, tax, depreciation and amortisation) also jumped 31.2 percent to ₹201.3 crore during the same period and its EBITDA margin expanded by 163 bps YoY to 22.55 percent in FY23.
Jupiter Hospitals compares itself with listed entities like Apollo Hospitals Enterprise, Fortis Healthcare, Narayana Hrudayalaya, Global Health, Krishna Institute of Medical Sciences, and Max Healthcare Institute.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie. We advise investors to check with certified experts before taking any investment decisions.