Buy This Midcap Healthcare Stock Potential Upside, TP Rs 840: Motilal Oswal Financial Services

Leasing brokerage firm Motilal Oswal Financial Services has assigned a 'Buy' rating on Global Health Ltd. with a target price of Rs 840 per share. According to the given target price, if you buy the stock at the given target price, it can fetch up to 18% gains, considering the given target price and the current market price of the stock. Global Health is a Midcao Healthcare sector company.

According to the brokerage firm, "MEDANTA has multiple 'firsts' in its kitty as it ventured into the uncharted hospital territory successfully. It was the 'first' to set-up a large-scale, superspecialty and single-location private hospital at Gurugram in CY09. It was also the 'first'private company to undertake Greenfield capex for super-specialty hospital at Lucknow (catering to central UP) and Patna (catering to eastern UP/western Bihar) cities. It has scaled up the developing hospitals significantly to achieve breakeven in the first year of their operations as against industry timeline of 2-3 years. Further, MEDANTA's organic bed capacity expansion plan is already in place until FY28, providing robust visibility of volume-led earnings growth over the next five years."

It added, "Overall, we expect its sales/EBITDA/PAT to register 14%/17%/26% CAGR over FY23-25 to INR35b/INR8.5b/INR5.2b. This would enable the ROE to expand 120bp to 17.3% over FY23-25. Further, the company had a cash surplus of INR5b (as of FY23), providing scope for inorganic opportunities."

Commenting on the Buy rating, the brokerage said, "Given the healthy execution skill set, strong brand recall, and growth visibility in near future, we model a 10% premium to MEDANTA vs. industry average of 21x. Thus, we assign 23x EV/EBITDA on 12M forward basis to arrive at our TP of INR840. Initiate coverage with a BUY rating on the stock."

Meanwhile, the shares of Global Health on Friday last traded 0.21% or Rs 1.50% higher at Rs 715.50 per share on the BSE. The stock of global health surged 3.16% in 1 week. It gained 2.29% in 1 month, and 39.94% in 6 months, respectively. It has given 55.37% return YTD.

The stock was listed last year on Nov 16, 2022. It has a market cap of Rs 19,204.05 Crore. Its 52-week high price on BSE is Rs 731.90 per share and its 52-week low is Rs 391.05 per share.

Disclaimer

The stock has been picked from the brokerage report of Motilal Oswal Financial Services. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.