Product portfolio

IOt Solutions

Company introduction

Founded in 1998, Kaynes Technology (Kaynes) has over 3 decades of experience in providing conceptual design, process engineering, integrated manufacturing and life-cycle support to OEMs. It is a leading integrated and IoT-enabled solutions provider with capabilities across the entire spectrum of ESDM. Currently, it is operating in the low-volume high-value niche in the EMS space. Industrial
electronics, railway electronics, medical electronics, defence electronics, automotive electronics and IT hardware are the key verticals that Kaynes services. It has served 370+ customers in 28+ countries; including marquee MNCs. Kaynes operates 16 advanced manufacturing facilities to undertake high mix and high value products with variable or flexible volumes. It has evolved as an integrated electronics player by moving into OSAT and HDI PCB.

Key Risk

Currently, the domestic EMS sector is turbo-charged largely due to favourable government policies. Any change in government stance on manufacturing-related
policies, particularly adverse changes, shall be the biggest risk to the EMS sector
growth. Kaynes is one of the largest EMS players in India. As the EMS sector grows,
we see a host of EMS players becoming large. If Kaynes is unable to retain its pace of growth and scale, it shall face challenges in the future from competition; this is potential risk.

Good morning

Global Health Limited company details report

Global Health Limited is one of the largest private multi-specialty tertiary care providers, operating in the Northern and Eastern regions of India. Under the brand “Medanta” it operates with a network of 5 hospitals in Gurugram, Indore, Ranchi, Lucknow and Patna. Apart from it, it has an upcoming hospital in Noida. GHL offers a comprehensive range of healthcare services across over 30 specialties and super specialties, including heart institute, cancer, neurology, internal medicines, digestives, kidney & urology, orthopedics, liver transplantation and others. As on 31st December 2024, it has a total bed capacity of 3,042 beds with 2,427 beds operational at a group level. The Group’s flagship hospital at Gurugram is one of the largest hospitals in India with a capacity of ~1,391 beds in a single location. Additionally, to offer a streamlined pathway for patient referrals, it operates 6 multi-specialty clinics with a diverse range of services such as dialysis, day care procedure, surgeries, general consultations and diagnostic services. To further extend care outside hospitals, it offers homecare services, ranging from sample collections to preventive health checkups, pediatric vaccinations and ICU at home; pharmacies (primarily driven by in-house OP pharmacies at its hospitals). The company also launched ‘Medanta Labs’ in January 2023 with establishing 22 collection centres across the region it operates in.

Medanta has classified its hospitals into Matured and Developing hospitals. Mature hospitals (operational for over 6 years) include hospitals at Gurugram, Indore and Ranchi. While developing hospitals (operational for less than 6 years) comprise of hospitals at Lucknow and Patna. Under the developing hospital, they launched OutPatient department facility at Patna in 2020, while InPatient department was opened in 2021, with operations commencing during FY22. The rationale behind this was to capture a sizeable demand from Northeast India, particularly from Jharkhand and Nepal. In Q1 FY25, revenue share from the mature and developing hospitals stood at ~73% and 27%, respectively. In Q2 FY25, the same stood at ~71% and 29%, respectively. In Q3 FY25, the same stood at ~67% and ~33%, respectively.

Medanta group

Hospitals wise revenue

Revenue breakup

Specialty wise revenue

#SALES #GROWTH 5 Year CAGR 17.8%

In FY24, sales increased by ~21% YoY to ₹3,275 cr due to improvements across operational metrices. It witnessed growth in IP and OP volumes by 15% and 18%, respectively at a group level. Other metrics like occupancy rate, occupied bed days and ARPOB improved positively. Revenue from their mature and developing hospitals rose by ~18% and 34% YoY, respectively. Geographically, ~94% of the overall revenue constituted domestic patients, with remaining from the international patients. In 9M FY25, sales grew by ~12% YoY to ₹2,761 cr, backed by higher inpatient volumes, supported by rising bed occupied days and strong contribution from the developing units. In Q3 FY25, in revenue terms, both matured (and developing hospitals grew by ~10% YoY, each. The key specialties contributed ~56% to revenue in Q3 FY25. In 9M FY25, a total of ~219 new beds were added to the existing capacity. From a YoY perspective, ~317 beds were added.

#EBITDA #GROWTH 5 Year CAGR 41.6%

In FY24, EBITDA increased by ~27% YoY to ₹799 cr. The increase was primarily attributable to case mix and bed expansions. During the period, it witnessed a rise in employee benefit expense due to the launch of Medanta labs and investments towards a new asset light model project in Indore. Purchase of pharmacy, lab and medical consumables constituted ~21% of the total revenue followed by manpower expense of ~35% (which constitutes employee benefit expense of 22% and consultant fees to doctors of 13%) . In 9M FY25, EBITDA increased by ~5% YoY to ₹652 cr, led by bed expansions and case mix. In Q3 FY25, EBITDA for the mature hospitals was ₹162 cr (up by ~9% YoY), while that of developing hospitals stood at ₹102 cr (up by ~5% YoY).

#PAT #GROWTH 5 Year CAGR 51.0%

In FY24, PAT increased by ~47% YoY to ₹478 cr. The growth was supported by increase in operating profit and lower finance costs. During the period, other income rose significantly due to rising interest income on bank deposits. In 9M FY25, PAT increased by ~8% YoY to ₹380 cr. The growth was supported by lower finance costs, offset by higher other income during the period. Increase in the occupancy rate along with ARPOB at both mature and developing units would help in improving profitability. Further, the company is focusing on ramping up their new units.

#EBITDA #MARGIN

In FY24, the EBITDA margin expanded by ~123 bps YoY to ~24% on account of better occupancy, brownfield additions and favorable specialty mix. The EBITDA margin of matured and developing hospitals stood at 25% and 32%, respectively in FY24. The Lucknow hospital commenced operations before the pandemic, witnessing an increase in footfalls during the pandemic. Due to this it recovered its costs, achieving break-even within a year of opening, making it a margin accretive hospital. In 9M FY25, EBITDA margin contracted by 150 bps YoY to 23.6%, due to rising employee cost due to annual increments. In Q3 FY25, EBITDA margins for mature and developing hospitals was 25% (v/s 25.3% in Q3 FY24) and 33.8% (v/s 35.3% in Q3 FY24), respectively. Given that the company follows a fixed-cost model, they are optimistic that as occupancy and volumes increase, they will leverage their fixed costs effectively and see improved profitability as they scale up.

#PAT #MARGIN

In FY24, the PAT margin expanded by ~256 bps YoY to ~15%. In 9M FY25, PAT margin contracted by 46 bps YoY to 13.8%. Going forward, there would be a scope for margin expansion once there is a pickup in the hospitals at a group level.

ROCE
In FY24, ROCE was 21.56%. The growth in the metric was aided by higher operating profit despite an increase in average capital employed. Ramp up of the new capacities and continuous improvements across metrics like ARPOB (Average Revenue per occupied bed), ALOS (Average length of stay) and occupancy helped in improving the operating profit and ROCE of the company.

#ROE

In FY24, ROE witnessed an upward trend, increasing to 17.96%. Company observed a rise in the ratio, owing to an increase in the net profit. The company has a focused presence in North India, delivering quality healthcare services which in turn drives patient volumes. Strong patient volumes postpandemic and cost efficiency drove the overall profit and improved the ROE. Medanta is further foraying into Central India, supported by expansions across the NCR region. This would help to widen its patient base, thereby improving profitability and maintaining strong return ratios of the company going ahead.

#COMPANY #POTENTIAL

• Indian healthcare industry – The industry is growing at a significant pace, owing to its strengthening coverage, services and increasing expenditure by the public and private sectors. Going forward, the industry is anticipated to grow, mainly driven by the increased government expenditure and initiatives to boost the healthcare sector, followed by better case mix, higher ARPOBs and bed additions. The sector is also witnessing significant private equity activity, with investments directed towards both multispecialty and single-specialty hospitals and clinics. • Government Initiatives – Various initiatives have been undertaken which seeks to comprehensively strengthen the healthcare system, right from primary to tertiary care, thereby providing healthcare assurance and increase the coverage of healthcare services. • Health • Urban/Rural • Medical Insurance industry - The overall sector in India has undergone significant changes driven by regulatory reforms, technological advancements and increased public awareness. Standalone health insurance premiums surged by ~26% in FY24 YoY. This further propels the demand for healthcare services as insurance policies partly cover health expenses, eventually reducing the healthcare cost burden and encouraging an individual to undergo treatment. shift - Existing hospital beds and hospitalization services have a high level of concentration in urban areas, which in turn impacts the accessibility and affordability of these services in rural areas. While in the public sector, ~61% of beds are present in urban areas, the proportion jumps to 80% in case of the private sector. On an aggregate level, 72% of total beds are in urban areas while only 28% are in rural areas. Expenditure - While the all-India average medical expenditure per hospitalization case in public hospitals is low at ~₹4,452, the same for private hospitals is as high as ~₹31,845. Despite higher costs, mostly people depend on private hospitals for treatment as these largely meet service quality needs and demands

#COMPANY #OUTLOOK

• At a group level, the key levers that would further drive growth would be ramp up of the developing hospitals and adding up new specialties. Also, by focusing on improving efficiencies, mainly driven by increasing volumes, partly supported by tariff hikes. Strategically positioned in attractive markets, Medanta is well-positioned to meet the growing demand and has established a strong reputation as a leading destination for specialized care, attracting patients from various states who require treatment for complex procedures. • They expect international revenues (~₹54 cr in Q3 FY25) to increase going ahead. However, one of the challenges faced by the industry as a whole is that Bangladesh, being a leading country, sending patients for medical care in India has taken a hit over the course of 6-9 months period. Although, the company expects this scenario to stabilize. • Regional Outlook – ➢ The greenfield project at Medanta Noida hospital, with ~550-bedded capacity is progressing as planned. The hospital is envisaged to be commissioned by Q1/Q2 FY26 with ~300 beds being operational. ➢ During the quarter, it further expanded into Ranchi with a 110-bedded hospital under a lease term agreement. Strategically located ~1.2 kms from the existing Medanta Ranchi hospital, the new facility enables seamless integration and operational synergies. The hospital is expected to commence operations by the end of Q1 FY26. Overall, the complete investment is expected to be ~₹50 cr. ➢ Overall, the company has ~1,000 bed additions planned in the next 2 years, including Noida and the remaining expansion taking place in the existing units. They have 3 greenfield projects underway, comprising ~1,600 beds which includes Oshiwara, Mumbai with a 500-bedded hospital; Pitampura, New Delhi with a 750-bedded hospital and South Delhi project with 400 beds planned. These projects are under various stages of approval and construction, which shall take 3-4 years to commenc