Understand Business and Valuation of Unihealth Consultancy SME IPO

Business Segments:

1. Project Management Consultancy: The core business revolves around offering project management consultancy services to hospitals.

2. Medical Centers and Hospitals: Operates under the ‘UMC Hospitals’ brand with a combined capacity of 200 beds across two facilities.

3. Distribution: Engaged in the distribution of pharmaceutical and medical consumable products.

4. Medical Value Travel: Involved in facilitating medical tourism.

Current Projects:

1. Health City in Undri, Pune: Providing consultancy for a 300+ bedded facility.

2. Other Projects: Consultancy assignments in Kenya and Angola.

Export and Distribution:

1. African Countries: Significant presence in Uganda, Tanzania, and Nigeria.

2. Product Range: Includes laboratory consumables, surgical sutures, dialysis consumables, general medical consumables, and intensive care medicines.

Organizational Structure:

1. Leadership: Led by first-generation entrepreneurs Dr. Anurag Shah and Dr. Akshay Parmar, both medical professionals.

2. Subsidiaries and JVs: Unihealth Pharmaceuticals Private Limited and Biohealth Limited are subsidiaries, while Victoria Hospital Limited and UMC Global Health Limited are joint ventures.

Geographic Presence:

Broad geographic reach extending to India and multiple African countries including Uganda, Nigeria, Tanzania, Kenya, Zimbabwe, Angola, Ethiopia, Mozambique, and DR Congo.

Analysis:

1. Diversification: Unihealth Consultancy Limited has a diversified business model encompassing consultancy, hospital management, distribution, and medical value travel.

2. Geographic Footprint: Strong presence in both India and Africa, showcasing a transcontinental reach.

3. Collaborations and Ownership: Strategic joint ventures and subsidiaries add robustness to their portfolio.

4. Leadership: Led by medical professionals, which adds credibility and specialized knowledge to the business.

5. Supply Chain Synergy: The business entities are interlinked, creating a supply chain synergy, especially between Unihealth Pharmaceuticals and their hospitals.

6. Growth Prospects: With projects like the Health City in Pune and other international consultancy projects, the company appears to be in a growth phase.

Financial And Valuation:

1. The revenue has increased from 24 Cr in Fy21 to 46 Cr in FY23.

2. EBITDA Margins in Fy23 is 31%.

3. PAT has increased from 5 Cr in Fy21 to 7.68 Cr in Fy23.

4. As on 31.03.2023, total receivables is ~27 Cr and total Revenue of FY23 is 46 Cr. That means 62% of revenue is stuck in receivables. Receivables days is 225. Not able to generate cash in Fy23.

5. Total Shares outstanding is ~1.53 Cr and Issue Price is 132 per share. So, Mcap is ~200 Cr. With PAT of 7.68 Cr, the P/E is 26x which looks fully priced in.

In summary, Unihealth Consultancy Limited appears to be a comprehensive healthcare services company with diversified revenue streams, strong leadership, a broad geographic presence but valuation seems to be high and high receivables will be a challenge.