Understand Jupiter Hospitals Business, Financials, Peer-Comparison and Valuations

A) Business Model

Jupiter Hospitals operates under an “all-hub-no-spoke” model, with all its existing hospitals capable of full-service healthcare delivery, from diagnostics to surgery and rehabilitation. This means each hospital is self-sufficient and not dependent on any central hub.

B) Geographical Presence

The hospitals are strategically located in densely populated micro-markets in western India, specifically in Thane, Pune, and Indore. This provides them with a large potential customer base and low competition from chain hospitals.

C) Bed Capacity & Doctors

The total bed capacity is 1,194 as of March 31, 2023, with a significant number of doctors (1,306) across specialties. They also have an additional hospital under construction in Dombivli, Maharashtra, adding over 500 beds.

D) Strengths

1) Specialized Services: Jupiter Hospitals offers specialized services like neuro rehabilitation and multi-organ transplants. This gives them a competitive edge in the healthcare market.

2) Certifications: Accreditation by NABH and NABL, along with specific certifications like NABH Safe-I and Nursing Excellence, adds credibility and ensures quality service.

3) Experienced Management: Led by seasoned professionals with significant experience in the healthcare sector.

4) Low Attrition Rates: Retention of healthcare professionals, particularly doctors, has been good, indicating a stable workforce.

5) Word-of-Mouth Marketing: The hospital has largely grown its brand through patient satisfaction, which is a strong marker of operational excellence.

6) Diverse Payor Mix: With a low dependency on government schemes, the hospital has a balanced mix of self-payers and insurance-based revenues.

E) Risks

1) Single Geographical Focus: Concentration in western India could make them susceptible to local economic downturns or policy changes.

2) Competitive Market: Despite low chain-hospital presence, the healthcare market is generally competitive, and the entry of new players could be a threat.

3) Dependence on Key Personnel: The hospital’s operations are heavily reliant on their existing management and healthcare professionals.

F) Financial Health and Valuations

1) Revenue : It has achieved a Revenue of INR 880 Crores in FY23 up from INR 483 Crores in Fy21.

2) In-patient Revenue: This income in Fy23 is ~710 Cr. That means ~80% of revenue comes from patients who are getting admitted in the hospitals for surgeries or normal treatment.

3) Out-patient Revenue: This income in Fy23 is ~170 Cr. That means ~20% of revenue comes from patients who are coming to hospital for routines checkups.

4) EBITDA Margins: In Fy23, Jupiter Hospitals has OPM of 23.45% which in line with majority of the peers.

5) PAT: In Fy23, Jupiter Hospitals has clocked a PAT of ~72 Crores.Mcap: The IPO of Jupiter Hospital is coming at Mcap of ~4800 Cr and with Bed Capacity of ~1194 , the Mcap/Bed = 4x which looks fully priced in. The Yatharth Hospital recently listed IPO came at Mcap/Bed of 1.83x, plus OPM margins were also better. IPO looks fully priced in.