Global Health’s Noida turnaround and bed ramp-up strengthen earnings growth outlook

Q1 FY27 Performance Ahead of Estimates

In its July 31, 2026 result update, Anand Rathi Research said Global Health (Medanta) delivered an above-par Q1 FY27 performance, supported by stronger in-patient volumes and better realisations. Consolidated revenue rose 27 per cent year-on-year and 13 per cent quarter-on-quarter to Rs13,041m, while EBITDA increased 26 per cent year-on-year and 18 per cent quarter-on-quarter to Rs2,868m.

Revenue and EBITDA were respectively 10 per cent and 16 per cent above Anand Rathi’s estimates. EBITDA margin was stable year-on-year at 22.0 per cent.

Reported PAT was Rs1,587m, broadly flat year-on-year, as higher depreciation and interest offset operating growth and a Rs196m exceptional gain in Q1 FY26 from reversal of an EPCG interest liability. Adjusted profit increased 14 per cent year-on-year.

Improved Operating Indicators

Average revenue per occupied bed, or ARPOB, rose 6 per cent year-on-year and 5 per cent quarter-on-quarter to Rs70,244. The improvement was helped by a better case mix, an improved payor mix and a lower average length of stay of 2.87 days versus 3.03 days.

Mature-hospital occupancy remained at 63 per cent despite a 22 per cent increase in bed capacity, while the developing Lucknow, Patna and Noida units recorded 62 per cent occupancy. Mature and new-hospital margins improved by 70 basis points and 270 basis points year-on-year to 24.1 per cent and 32.0 per cent, respectively.

Noida Turnaround Supports Earnings Momentum

The Noida unit was a key positive during the quarter. Noida revenue rose 63 per cent quarter-on-quarter to Rs855m, while its EBITDA loss narrowed sharply to Rs49m from Rs236m in Q4 FY26.

Excluding Noida, EBITDA expanded 24 per cent year-on-year to Rs3,200m. Anand Rathi expects Noida to reach EBITDA breakeven, alongside steady growth at mature and newer hospitals and improved ARPOB from a superior payor mix, to sustain earnings momentum.

Capacity Expansion and New Projects

Global Health added 72 beds in Q1 FY27, comprising 51 at Noida and 21 at Lucknow, taking total installed capacity to 3,737 beds. Noida had 433 operational beds out of its planned 550.

The board approved an expansion of the planned Guwahati hospital from 400 to 650 beds. The project will be built in phases over the next three to four years at estimated capex of Rs9,700m, funded through internal accruals and debt. The 80-bed Indore cancer unit is expected to be operationalised in Q3 FY27.

Earnings Outlook and Estimates

Anand Rathi forecasts revenue, EBITDA and PAT CAGR of 16 per cent, 25 per cent and 20 per cent, respectively, over FY26 to FY28E. Reflecting improved performance at existing units and a faster Noida turnaround, the broker raised FY27E and FY28E EBITDA estimates by 3 per cent each.

Valuation and Recommendation

Anand Rathi maintained its BUY recommendation and raised its target price to Rs1,550 from Rs1,400. The broker values Global Health at 28 times FY28E EV/EBITDA, compared with 26 times previously, because of improved earnings visibility.

Key Risks

• Delays in project execution.
• Regulatory risks, including price controls, margin caps and mandatory bed allocation.
• A decline in international business.