Medanta valuation attractive post correction; JM Financial pegs 42% upside

Analysts at JM Financial remain bullish on Global Health (Medanta) and have reiterated their ‘Buy’ rating on the stock, citing that the recent correction offers an entry opportunity while growth remains intact.

 

Notably, Medanta stock has declined 30 per cent over the past six months and about 15 per cent in the last one month, weighed down by the launch of the Noida greenfield unit and recent geopolitical concerns arising from the Middle East conflict. The stock is currently trading at 21x FY27E Ebitda, implying a 25 per cent discount to its historical average.

 

However, these factors, according to JM Financial analysts Amey Chalke and Abin Benny, are transitory and likely to normalise over the coming quarters.  "At the network level, Medanta’s strong quaternary care positioning continues to drive robust ARPPs, comparable to Max, alongside a broader plan to scale to 6,382 beds by FY29 from 3,579 currently, underpinning operating leverage and Ebitda expansion over the medium term," wrote the analayts in a research report. 

 

 

With improving earnings visibility, margin expansion tailwinds, and a more reasonable valuation backdrop, the analysts value the company at 25x FY28E Ebitda and maintain a ‘Buy’ rating with a target price of ₹1,382. The assigned target price implies a potential upside of 42.47 per cent from the previous close ₹970 per share. Amidst this, the stock was trading at ₹1,006, up 3.34 per cent from its previous close.  Amidst this, the stock was trading at ₹1,006, up 3.34 per cenet from its previous close at 09:25 AM on the NSE. 

Noida Q3 performance – ramp-up broadly in line; losses peaking

According to JM Financial, the Noida facility delivered a broadly in-line ramp-up in Q3FY26, with revenue of ₹343 crore and Ebitda loss of ₹320 crore, as initial hiring and commissioning costs were largely absorbed, indicating losses are near peak. Operational scale-up included 102 new beds (total 328) and nine new OTs (total 14), with plans to add 200+ beds in the next phase. As of December-end, 220 consultants had been hired and most senior positions filled, although a few specialties such as paediatrics, obstetrics, liver transplant, and select niche units remain non-operational.  "Revenue momentum improved through December and has sustained post-quarter, supported by gradual activation of key specialties, while radiation oncology and nuclear medicine infrastructure were in place with regulatory approval still pending," said JM.   CHECK Stock Market LIVE Updates

Noida visibility improving with empanelments and operating leverage

According to JM Financial, ramp-up visibility remains strong following NABH audit completion, enabling faster empanelments, many of which are already in place, with the balance expected shortly. Analysts expect key empanelments to start impacting revenue from Feb’26. Occupancy is projected to scale up toward company benchmarks. “Revenue should steadily build toward ₹60 crore, although cost normalisation could result in Q4FY26 losses of ₹20–25 crore. Oncology infrastructure, including bunkers and doctor hiring, is largely ready, with radiation therapy expected to commence shortly, aiding case-mix improvement,” said the brokerage.

 

Analysts also noted that the upcoming Jewar airport could act as a structural demand driver via incremental medical value travel over the medium term.

Network performance – stable core with improving growth visibility

At the network level, Medanta delivered mid-teens Y-o-Y growth (excluding Noida) in 9MFY26, with Ebitda margin largely flat. Exposure to the Middle East is limited, and any temporary softness in patient inflows is expected to be offset by domestic demand. JM Financial expects healthy Q-o-Q and Y-o-Y growth in Q4FY26, supporting FY26 guidance of 19 per cent revenue growth and 21 per cent Ebitda margin, muted due to Noida losses.

Realisation – premium positioning drives ARPP strength

JM Financial expects Medanta to continue benefiting from strong clinical positioning and a doctor-led brand, supporting superior ARPPs, broadly comparable with peers such as Max. The hospital attracts a high share of complex cases and second/third opinion patients, enabling better outcomes and higher realisations. Analysts project ARPOB of ₹66,000 in FY26. “Though substantially higher for the core Medicity asset, the overall number moderates due to occupancy prioritisation in newer units,” said the brokerage.

Growth outlook – capacity expansion with calibrated capital deployment

JM Financial noted management plans incremental brownfield additions of 496 beds with minimal capex, including 193 in Lucknow, 81 in Patna, and 222 in Noida. Growth is expected from brownfield expansion, improving occupancy across new hospitals, and continued strength in core assets, supporting network-level profitability.  Beyond FY28, 2,300 beds are planned across four greenfield hospitals, taking total bed count to 6,375. The brokerage expects revenue/Ebitda/PAT CAGR of 14/26/32 per cent over FY26–28.

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