Jeena Sikho — Q2 FY25 earnings call

Call held 13 Nov 2024

Management summary

Jeena Sikho Lifecare Limited reported robust H1 FY25 results, driven by strong growth in hospital services and product sales. The company achieved a 36% YoY revenue increase to INR214 crores and a 47% YoY PAT growth to INR46.88 crores. Strategic expansion in bed capacity, a focus on patient-centric Ayurvedic treatments, and an aggressive entry into the OTC medicine market are key drivers for future growth, alongside international expansion plans.

Highlights

  • Revenue from operations grew 36% YoY to INR214 crores in H1 FY25.

  • Hospital services revenue surged 72% YoY to INR114 crores.

  • Product sales increased 10% to INR100 crores.

  • EBITDA for H1 FY25 was INR59.28 crores, up 32% YoY, with a 28% margin.

  • PAT grew 47% YoY to INR46.88 crores, achieving a 21-23% margin in H1 FY25.

  • Current bed count is 1530, with an occupancy rate of 51% in H1 FY25, up from 38% last year.

  • Average revenue per bed (ARPOB) increased to INR8100 per day in H1 FY25 from INR7900 in FY24.

  • The company plans to launch 12 OTC products within 3 months and aims to be a top 3 medicine business in India within 2 years.

Key financials

  1. Revenue ₹214 Cr +36%YoY
  2. EBITDA ₹59.28 Cr +32%YoY
  3. EBITDA Margin 28%
  4. PAT ₹46.88 Cr +47%YoY
  5. Bed Count 1,530 beds
  6. Occupancy Rate 51%
  7. ARPOB ₹8,100

What they filed

Q1 FY27: revenue up 28.7%, net profit up 29.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue114 116 139 174 190 +67%222 +91%216 +55%224 +29%
EBITDA40 30 46 79 92 +130%101 +237%78 +70%92 +16%
Net profit27 13 25 51 59 +119%67 +415%45 +80%66 +29%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹214 Cr Total
  • Hospital Services ₹114 Cr 53.3%
  • Product Sales ₹100 Cr 46.7%

Guidance & targets

Capacity

  • Total Beds Capacity · by end of FY25 · High confidence 2100-2200 beds
    So, by the end of this year, we will have 2100-2200 beds.

    — Manish Grover

  • Total Beds Capacity · FY26 · High confidence 3000 beds
    By 31st March, I plan to have 2100 beds and by next year, I will have 3000 beds.

    — Manish Grover

  • Total Beds Capacity · next 3-5 years · High confidence 5000 beds
    So, in the next 3-5 years, I plan to have 5000 beds.

    — Manish Grover

Revenue

  • Revenue from Operations Revenue · FY25 · High confidence INR450 crores
    Our guidance is to make a revenue of INR450 crores and a 25% PAT margin. This year, this is my target.

    — Manish Grover

  • Revenue from Operations Revenue · FY26 · High confidence INR650-INR700 crores
    In FY26, my target is INR650-INR700 crores. I want to take INR1000 crores till FY28.

    — Manish Grover

  • Revenue from Operations Revenue · FY28 · High confidence INR1000 crores
    I want to take INR1000 crores till FY28.

    — Manish Grover

Profitability

  • PAT Margin Profitability · FY25 · High confidence 25%
    Our guidance is to make a revenue of INR450 crores and a 25% PAT margin. This year, this is my target.

    — Manish Grover

  • PAT Margin Profitability · FY26 · High confidence 27%-30%
    Sir, my target will be 27%-30% to increase the PAT. ... So, our target is to increase the PAT by 25% in this year and by 27%-30% in the next year.

    — Manish Grover

Market Share

  • Medicine Business Ranking Market Share · within 2 years · High confidence Top 2-3
    And I hope that in the next 1-2 years, within 2 years, I will reach number 2, number 3 in medicine business in India.

    — Manish Grover

ARPOB

  • Average Revenue Per Bed ARPOB · null · High confidence INR8500 to INR8700
    So I expect it to go from INR8500 to INR8700. It won't go above INR9000.

    — Manish Grover

OTC Launch

  • Actual Launch OTC Launch · null · High confidence within 3 months
    I will do the actual launch within 3 months.

    — Manish Grover

International Expansion

  • New Setups in Dubai International Expansion · within 1 year · High confidence 6
    We will open 6 new setups in Dubai within 1 year.

    — Manish Grover

Main Board Listing

  • Listing Date Main Board Listing · FY25 · High confidence FY25 (by June)
    The main board will come this year. We will come to the main board in FY25. We will complete 3 years in March. So, we will apply in March and by June, we will come to the main board.

    — Manish Grover

Risks & concerns

  • Delay in regulatory approvals for OTC products

    medium

    Management stated 'Some approvals are left because we have taken approval from ICMR. We are going to the clinical trial of Indian governments.' and 'just file approval pending.'

    Management acknowledged

  • Slower than anticipated inclusion of Ayurveda in Ayushman Yojana by state governments

    medium

    Management noted that while the Supreme Court ordered inclusion, 'practically the companies are not accepting it yet' for cashless, and 'all these things will take 6 months to 1 year' for global approvals.

    Management acknowledged

  • Competition in the OTC market

    low

    Management believes their products are unique and not directly competing with existing players like Dabur, Patanjali, stating 'my products have not been thought of or made by anyone else in the market.'

    Management downplayed

Q&A highlights

3 direct
Revenue distribution and expansion strategy Direct
Now, our major hospitals are in Lucknow, Mumbai, Chandigarh, Gujarat and Meerut. And after this, the list of the expansion of the new hospitals, I will tell you the list. Now, the new hospitals that we have opened, we have started 3 in Gujarat, Vadodara, Ahmedabad and Surat. Apart from this, Chennai, Bangalore, Assam, we have covered every area of India.

This question clarified whether revenue was concentrated or distributed and provided a detailed list of current and upcoming hospital locations, indicating broad geographic expansion.

Asked by Sagar Jain

Impact of Ayushman Yojana and insurance cashless facilities Direct
Sir, the Indian government has notified on 1st April 2024 that all companies have to be cashless. But practically the companies are not accepting it yet. So just 4 days ago, we had an agreement with GIPSA, all our hospitals, NABH. GIPSA's National Insurance, Oriental Insurance; all 4 are government companies. So we had a tie-up with GIPSA 4 days ago.

This revealed a significant regulatory tailwind (Ayushman Yojana inclusion of Ayurveda) and progress on cashless insurance tie-ups, which could substantially boost patient footfall and revenue.

Asked by Chirag

OTC medicine launch strategy and competitive positioning Direct
We have done a 6-month homework trial. So as soon as they heard that we are launching, they are very excited. And we have also made dealers in the market. We will start in the first phase in Punjab and UP. And we are also bringing our own Shilajit, our own kidney detox product, liver detox product. I am coming to the market with about 12 products.

This detailed the company's strategic entry into the OTC market, including product pipeline, launch strategy, and ambitious market share targets, indicating a new growth avenue.

Asked by Amit Jeswani

3 min read 7 chapters

Detailed narrative

Robust H1 FY25 Financial Performance

Jeena Sikho reported a strong H1 FY25, with revenue from operations growing 36% year-on-year to INR214 crores. This growth was primarily fueled by a 72% surge in hospital services revenue, reaching INR114 crores, while product sales also contributed with a 10% increase to INR100 crores. The company achieved an EBITDA of INR59.28 crores, up 32% YoY, maintaining a healthy 28% margin, and PAT grew 47% YoY to INR46.88 crores, reflecting a 21-23% PAT margin.

Aggressive Bed Capacity Expansion and Improved Occupancy

The company is actively expanding its bed capacity, currently managing 1530 beds, up from 1277 beds by March 31st last year. Occupancy rates have significantly improved to 51% in H1 FY25 from 38% in the previous year. Management targets to reach 2100-2200 beds by the end of FY25, 3000 beds by FY26, and an ambitious 5000 beds within the next 3-5 years, with a long-term vision for 10,000 beds. Average Revenue Per Occupied Bed (ARPOB) also saw an increase to INR8100 per day in H1 FY25, up from INR7900 in FY24.

Strategic Entry into OTC Market with Clinical Trial Products

Jeena Sikho is poised to enter the Over-The-Counter (OTC) medicine market within the next three months, following 6 months of homework and trials that generated INR27 lakhs per month in sales. The company has completed 7 clinical trials for products targeting conditions like blood pressure, diabetes, kidney, and liver issues. They plan to launch approximately 12 products, including 6 clinical trial-backed ones, with an ambitious goal to become a top 2-3 player in the Indian Ayurvedic medicine business within two years.

Advancements in Insurance Coverage and Government Empanelment

Significant progress has been made in securing cashless treatment facilities for Ayurvedic services. Following a government notification for all companies to be cashless by April 1, 2024, Jeena Sikho recently signed an agreement with GIPSA, covering four major government insurance companies. Additionally, 11 private insurance companies have already tied up for cashless services, with 16 more pending. The company also highlighted the Supreme Court's order for state governments to include Ayurveda in the Ayushman Yojana, which is expected to further boost patient footfall and occupancy to 80-90%.

International Expansion and Acquisition Strategy

The company is pursuing international expansion, with setups initiated in Nepal and an agreement expected in Dubai within the month. Plans include opening 6 new setups in Dubai within one year and exploring acquisitions there. Domestically, Jeena Sikho is evaluating 3-4 acquisition opportunities, including two factories and other businesses, with one example being Oregano Life (INR100 crores turnover, INR12-13 crores PAT). The strategy also involves revenue-sharing models with existing hospitals to expand reach without significant capex.

Focus on Process-Driven Treatment and Doctor Workforce

Jeena Sikho emphasizes a process-driven treatment protocol, ensuring consistent quality across all hospitals for conditions like kidney failure, cancer, and liver diseases. The company's doctor workforce has grown to 411 on payroll in H1 FY25, up from 307 at the end of FY24, with 1010 doctors in waiting. Management highlighted the ease of recruiting Ayurvedic doctors (BMS degree holders) due to competitive salaries and ESOP plans, with the first round of ESOPs already distributed to 675 employees.

Financial Guidance and Main Board Listing

For FY25, Jeena Sikho targets a revenue of INR450 crores with a 25% PAT margin. Looking ahead, the company aims for INR650-INR700 crores in revenue by FY26 and INR1000 crores by FY28. PAT margins are projected to improve to 27-30% in FY26. The company also confirmed its intention to list on the main board in FY25, with an application planned for March and listing expected by June, after completing three years on the exchange.

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