Manipal Health Enterprises Limited (Neutral)

Highlights

Manipal Health Enterprises Limited (MHEL), incorporated in 2010, operates 49 hospitals with 13,307 licensed beds (9,252 Owned, 3,785 O&M) across 14 states and union territories.  They operate a pan‑India network of multispecialty hospitals delivering a comprehensive range of care services-from outpatient services to complex tertiary and quaternary interventions.

MHEL offer clinical services across several specialties, with a focus on tertiary and quaternary care, particularly in cardiac sciences, oncology, neurosciences, gastro sciences, orthopaedics, and renal sciences (CONGO‑R). These specialties involve high‑acuity cases or cases that are severe, complex and require advanced interventions and high levels of care.

The company is the largest player in (i) Karnataka, (ii) Maharashtra and Goa region, and (iii) in select states of West Bengal, Odisha, Jharkhand, and Sikkim (in eastern India). Further, MHEL maintain a balanced presence across metros and non-metros, with 46.78 pct of licensed beds located in metros and 53.22 pct of licensed beds located in non-metros.

Out of the total proceeds of Rs. 92,750 mn, ~Rs. 55,5278 mn would go towards repayment of certain outstanding borrowings and accrued interest thereon availed by one of their material Subsidiaries, ~Rs. 5,740 mn would go towards acquisition of minority stake in stepdown Subsidiary, Sahyadri Hospitals Private Limited, rest ~Rs. 18,732 mn would go towards general corporate purpose. Additionally, ~Rs. 12,750 mn would go towards existing selling shareholders of the company.

Key Highlights

• The Indian healthcare delivery market is estimated to have reached Rs. 7.6-7.8 trillion. In FY26 and it expected to reach Rs. 11.2-12.2 trillion by FY30P, indicating 10-12 pct CAGR over FY26-FY30. In terms of value, the In-patient Department (IPD) is estimated to have accounted for 71-72 pct of the healthcare delivery market in FY26, and the OPD for the balance. Though OPD volume outweighs IPD volume, the latter contributes the bulk of revenue for healthcare facilities.

• MHEL growth has been driven by strategic capital allocation and a combination of organic expansion and strategic acquisitions. Acquisitions in the last 3 years include AMRI Hospital Private Limited (AMRI) (Sept 2023), Medica Synergie Private Limited (Medica Synergie) (July 2024), and Sahyadri Group (Oct 2025), which MHEL is integrating and upgrading within their network.
• MHEL receive payments for their inpatient and outpatient services through a mix of out-of-pocket payments, primarily in cash and credit arrangements (30.33 pct) including through TPAs (49.68 pct), the remaining payment arrangements comprise reimbursements government programs (13.8 pct) and payments by international patients and corporations (6.19 pct).
• Through their brownfield expansion plans, MHEL expected to add ~483 (185 in FY27/76 in FY28, 222 in FY29), licensed beds across existing hospitals by 2030 and through their greenfield expansion plan MHEL expected to add 1,943 (625 in FY27/843 in FY29, 475 in FY30) licensed beds in Karnataka, Maharashtra by 2030 which will increase HMEL capacity to 15,463 beds.
• MHEL’s key growth strategies include (i) To capitalizing growth opportunities in existing facilities and organic network expansion (ii) Strategic acquisitions to enter and consolidate market positions and improve access and patient care (iii) Leverage digital, AI and technology to extend patient reach and access, transform patient and clinician experiences, expand out-of-hospital care and focus on operational excellence to drive efficiencies. (iv) Continue to attract, develop, and retain medical talent (v) Invest in advanced medical infrastructure and clinical innovations.
• SBI AMC’s sales have grown 27.7 pct CGAR over FY24-26 while EBITDA and profit grew 32.3 pct CAGR and 21.6 pct CAGR over same year. In FY26, the company reported sales of Rs. 43,895 mn, increased 22 pct YoY. EBITDA rose 25.1 pct YoY to Rs. 34,718 mn while profit increased by 21.6 pct YoY to Rs. 30,674 mn.

Key Risk

• MHEL is exposed to legal claims and regulatory actions arising from the provision of healthcare services which includes claims arising out of alleged medical negligence by doctors and other healthcare professionals and may be subject to liabilities arising from operational and equipment-related risks which could materially and adversely affect their business.
• The provision of healthcare services involves high costs such as doctors’ professional fees and employee benefits expense, and if MHEL fail to increase their sales in line with increases in such costs, can affect their business.

Financial Performance

Source: – RHP.

Proforma Financial Performance

Peer Comparison based on FY26 Financials

Other operational KPI’s

Valuation

Manipal Hospitals is one of India’s foremost multi-speciality healthcare providers catering to both Indian and international patients. They are a part of the Manipal Education and Medical Group (MEMG), a leader in the areas of education and healthcare. With a group of 49 hospitals spread over 24 cities, MHEL are the second-largest hospital chain in India. At the upper end of the price band of Rs. 590, the issue is priced at EV/EBITDA of 32x its FY26 earnings based on post issue capital. The issue appears to be fully priced.

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