Yatharth Q1FY27: consolidated PAT +8% YoY as margins compress despite 51% revenue surge
PAT +8.05% YoY · revenue +51.47% · margins compressing · miss vs street
₹392.65 Cr
+51.47% YoY
₹45.42 Cr
+8.05% YoY
11.44%
-4.3pp YoY
₹4.88
Yatharth Hospital's consolidated Q1 FY27 revenue rose 51.5% YoY (14.96% QoQ) to Rs392.7 Cr, comfortably ahead of management's own FY27 guidance to "surpass" FY26's 36% YoY growth, and above the Rs314 Cr Street estimate from Uniresearch/Univest. Consolidated PAT of Rs45.4 Cr grew just 8.0% YoY (1.6% QoQ) and came in well below the Street's Rs59 Cr PAT estimate −a clear miss on the bottom line even as revenue beat. No exceptional items feature in either period, so the 8% YoY PAT growth is a clean, unadjusted number, not distorted by one-offs.
Q1 FY-2027 vs prior quarters
The gap between revenue and profit growth traces to margin compression across both operating and financing lines. Consolidated OPM (EBITDA margin) fell to 23.35% from 25.02% a year ago −slipping below management's guided 24-25% band that was reaffirmed just last quarter −while NPM dropped more sharply to 11.44% from 15.74% YoY (and from 12.82% last quarter). Finance costs jumped roughly 34x YoY to Rs6.59 Cr and depreciation rose 89% to Rs28.24 Cr, both consequences of debt-funded capacity additions, including the Rs100 Cr acquisition of an under-construction 250-bed Gurugram hospital completed June 12, 2026. Employee costs also grew 61.7% YoY to Rs77.91 Cr as the company staffed up ahead of ramp-up.
The stock went into the print at ₹898.75, up 8.4% over the past month of trading.
For context: this is the highest quarterly PAT in the last 6 quarters on our records; PAT has now risen for 3 consecutive quarters; revenue is at a 6-quarter high.
Yatharth Hospitals provided strong guidance for FY27, expecting to surpass the 36% YoY revenue growth achieved in FY26. They also maintained their consolidated EBITDA margin guidance of 24-25% and anticipate further improvements. The company is confident in its cluster-based expansion strategy, aiming to reach 5,000 be
— This quarter: missed
Standalone PAT grew only 3.9% YoY to Rs28.17 Cr, versus consolidated's 8.0%, confirming that most of the incremental profit and nearly all of the revenue growth is coming from subsidiaries and newer hospital assets rather than the core standalone entity. Consolidated PAT attributable to owners was Rs47.06 Cr (EPS Rs4.88, +12.2% YoY), higher than total group PAT of Rs45.42 Cr because non-controlling interests posted a Rs1.64 Cr loss for the quarter −a detail worth noting when reconciling the two profit figures. Alongside results, the board declared a first interim FY27 dividend of Rs0.50/share (record date August 14, 2026) and approved a new employee stock option scheme covering 2.5 lakh shares, both signalling confidence even as near-term margins soften. No separate management press release was available in the record for this quarter.
W1
Whether OPM recovers toward management's guided 24-25% EBITDA margin band after slipping to 23.35% this quarter
W2
Ramp-up trajectory and margin contribution of the newly acquired 250-bed Gurugram hospital (Rs100 Cr, construction-stage, commercial ops targeted within 12 months)
W3
Finance-cost trend as debt-funded cluster expansion (targeting 5,000 beds, ~70% via acquisitions) continues −costs already up ~34x YoY this quarter
Figures converted from INR Millions (filing) to Crore, /10. Consolidated profitAfterTax (Rs45.42 Cr) is total group PAT before NCI split, matching our DB's quarterly-consolidated basis; PAT attributable to owners was Rs47.06 Cr (basic EPS Rs4.88) because non-controlling interests posted a Rs1.64 Cr loss this quarter. No exceptional items in either period. Prior-period comparatives in this filing are regrouped/reclassified per company note 6/7, causing minor variance vs previously recorded June-2025 figures.
Record revenue masks margin miss; profitability lags despite 52% growth
The verdict, the claims that held up, the sharpest analyst exchanges, and the risks — the earnings call, decoded from the transcript.
Hold
confidence 7/10
Grade B
Revenue beat prior guidance (52% vs 36% guidance); EBITDA margin missed 24-25% target at 23.3%. Acquisition timing milestones tracking (Faridabad, Delhi, Agra). Track record: one quarter of data.
Optimistic
next 1–2 quarters
Optimistic
multi-year
Yatharth delivered exceptional revenue growth of 52.3% YoY, far exceeding prior 36% guidance, and its acquisition playbook is executing faster than expected (Faridabad breakeven in 9 months vs 12-14 months). However, profitability is lagging: PAT grew only 8% YoY and EBITDA margin came in at 23.3% vs 24-25% guidance, due to high depreciation (₹29 Cr/quarter) and rising interest costs from ₹210 Cr to ₹300 Cr debt. The company is in a capacity-building phase; near-term margins will remain pressured, but the long-term case (5,000 beds in 2.5 years, newer hospitals targeting 25-27% EBITDA margins by FY28-29) remains intact if execution holds.
₹392.7 Cr
Revenue · +52.3% YoY₹45.4 Cr
Reported PAT · +8% YoYCompressing
Margins · vs guidance: MixedDid the claims hold up?
Achieved record revenue growth of 51% YoY and EBITDA growth of 39% YoY
METRevenue grew 52.3% YoY (₹392.7 Cr); EBITDA ₹91.7 Cr at 23.3% margin; PAT grew only 8% YoY despite revenue surge
Newer hospitals at Faridabad, Delhi, Agra contributed 27% to quarterly revenue mix
MET₹106.7 Cr out of ₹392.7 Cr = 27.2% of total revenue
Faridabad Sector 20 achieved EBITDA breakeven in record 9 months with monthly revenue of ₹12-13 Cr and ARPOB closer to ₹40,000
METSpecific operational milestones claimed but EBITDA margins still only 4-5% at breakeven; limited to incremental margin expansion near-term
New Delhi and Noida Extension hospitals crossed ₹50,000 ARPOB mark for first time
METDelivered ARPOB data shows Noida Extension and Model Town (New Delhi) both exceeded ₹50,000 ARPOB
Group will maintain consolidated EBITDA margin guidance of 24-25%
OVERSTATEDQ1 consolidated EBITDA margin came at 23.3%, below 24-25% guidance band; management reiterated 'upwards of 24%' but already facing margin pressure
PAT and profitability have improved meaningfully with operating leverage kicking in
MISSPAT growth of only 8% YoY despite 52% revenue growth; NPM compressed to 11.4%; depreciation ₹29 Cr/quarter and interest ₹6.6 Cr offsetting operational leverage
Earnings quality
What changed since the last call
5,000-bed timeline acceleration
UpgradePrior guidance was 3 years; management now confident to achieve in 2.5 years. 3,200 beds already announced/under construction; remaining 1,800 beds to follow. Acquisition playbook validating faster ramp-up.
Consolidated EBITDA margin guidance
MaintainedReiterated 'upwards of 24% EBITDA margin for full FY27', but Q1 delivered 23.3%. No formal cut; management defending guidance despite near-term pressure from new hospital drag and capex absorption.
New hospital profitability trajectory
UpgradeFaridabad Sector 20 reached breakeven in 9 months vs 12-14 months expected; Agra at 20-23% EBITDA margin (vs 11% starting baseline). Management now guiding newer hospitals to 25-27% EBITDA margins within 2 years (by FY28-29).
Payer mix and ARPOB strategy
UpgradeExplicitly restricting government mix in new hospitals to ₹50k ARPOB vs prior ₹35-40k. International expansion initiatives underway (5 OPD centers opening in CIS/Africa).
Capex per bed trajectory
DowngradeCapex per bed increased from ₹30.7 Lakh (historical) to ₹61.4 Lakh (recent). Guidance for next 1,800 beds: ₹75-80 Lakh per bed (vs ₹61.4 Lakh now). Driver: land price inflation, equipment (oncology LINAC), scale/brand positioning in NCR.
The Q&A
Analysts pressed hard on occupancy stagnation in new hospitals (Delhi, Faridabad) and margin compression. Management deflected on occupancy by citing census bed expansion rather than low demand; held firm on guidance despite missing Q1 EBITDA target. On PAT margin decline, management transparent but defensive: attributed to capex depreciation and debt interest, claimed it's 'temporary' and will ease once capex stabilizes. Analysts skeptical; no one raised conviction.
Bed capacity & cluster strategy — Shubhi Gupta, Trinetra Asset Managers
Answered3,200 beds already announced (Gurugram + brownfield). 5,000 achievable earlier than 3-year timeline, likely ~2.5 years. Focus remains North Delhi-NCR, with exploration of UP capital cities and Rajasthan/Haryana metros. All new hospitals targeting ₹50k ARPOB.
Payer mix & international expansion — Shubhi Gupta, Trinetra Asset Managers
PartialNew hospitals already 90%+ cash/insurance; government mix intentionally restricted. 5 OPD centers opening in CIS/Africa; senior marketing person posted to Africa. No quantified benefit given; claimed 'playbook evident' but did not provide revenue/margin impact.
New hospital occupancy plateau — Akshat Mehta, Seven Rivers Holding
PartialOccupancy not stagnant; census beds increased so percentage appears lower. Delhi census rose 100→150 beds; Faridabad 100→200 beds. IPD volumes and revenue growing QoQ. Empanelment mostly complete but intentionally restricting government business. On track for breakeven in 15-17 months (Delhi) and holding 9-month (Faridabad).
PAT margin deterioration — Satyam Kumar, AAA Holdings
AnsweredHigh capex (Gurgaum, oncology LINAC orders) and bank debt increase (₹210→₹300 Cr) driving depreciation ₹29 Cr/quarter and interest ₹6.6 Cr/quarter. This is temporary; high capex not planned for upcoming quarters. Pressure will ease. EBITDA margin guidance 24-25% maintained.
Consolidated EBITDA margin timeline recovery — Vedant Kabra, AVN Capital
AnsweredNever. No guidance for 28% EBITDA at group level. Company will continue adding new hospitals; once Delhi/Faridabad contribute, Gurugram will ramp. Targeting 'upwards of 24%' EBITDA margins at group level FY27, with 'a percentage up or so in few years' but no 28% target.
ALOS decline & government patient percentage — Satyam Kumar, AAA Holdings
AnsweredALOS decline due to surgical mix in new hospitals and low government % in those units (government patients have higher ALOS). Government mix rose 4pp to 40%, but volumes declining; increase is 1-2% from CGHS rate revision only. Should stabilize at current ALOS level.
Hospital room charge price capping regulatory risk — Ashish T, UTI
DodgedNo comment yet; waiting for regulatory frameworks. Historically, government has supported private hospital growth (stent capping, implant capping happened but industry adapted). If cost optimization needed, hospitals will do it. Long way from any implementation.
Depreciation and capex outlook — Bhagwat, Prosperity Wealth Management
Answered₹20-30 Cr per quarter (₹29 Cr this quarter). Same trend for Q2-Q4 FY27 because Gurugram won't be operational until Q1 FY28. Fixed assets ₹1,200 Cr implied from ₹20-30 Cr quarterly depreciation.
New hospital EBITDA margin recovery timeline — Akshaya Shinde, Centrum Broking
AnsweredWithin two years (by FY28-29), new hospitals should reach 25-27% EBITDA margins, like mature units. Agra already at 20-23%, so recovery faster than 2 years for that asset. Confidence high based on recent quarter performance.
Brownfield expansion timeline — Vicky Wagwani, Guardian Capital
AnsweredGreater Noida construction up and kicking; delayed slightly due to monsoon. Noida Extension final drawings under review. Full capacity expected in 15-18 months; 200 beds earlier, 250 beds in 18-19 months.
Guidance
FY27 revenue growth to surpass FY26's 37% YoY growth (prior guidance implied >37%)
HighQ1 delivered 52.3% YoY, well ahead of 37%. Full year tracking 'on pace' for guidance; ramp from new hospitals (Gurugram starting Q1 FY28) will sustain momentum.
Consolidated EBITDA margin 24-25% (FY26 guidance reiterated)
MediumQ1 delivered 23.3%, below 24-25% band. Management reiterated 'upwards of 24%' but acknowledged new hospital drag. Older hospitals at 28.1% adjusted EBITDA show mature-unit leverage; new hospitals will grow into 24-25% EBITDA by full year as volumes ramp.
New hospitals to reach 25-27% EBITDA margins within 2 years (by FY28-29)
MediumAgra already at 20-23%; Faridabad Sector 20 at breakeven with path to 15-20% within 15-18 months. Delhi Model Town on track. Assumes occupancy ramp to 70%+ and surgical mix shift in newer units. Risk: if government mix expands or competitive pricing pressure emerges.
₹75-80 Lakh capex per bed for next 1,800 beds (Gurugram, brownfield expansions, new acquisitions)
MediumPrior capex per bed was ₹30.7 Lakh; recent ₹61.4 Lakh reflects land inflation, equipment (LINAC ~₹15-20 Cr per unit), brand positioning. Management reiterated 1,800 beds remains on plan to reach 5,000 total. Debt increased to ₹300 Cr to fund, with rest from internal accruals.
Risks the call surfaced
Profitability margin erosion
HighQ1 EBITDA margin 23.3% vs 24-25% guidance; PAT growth only 8% despite 52% revenue growth. Depreciation ₹29 Cr/quarter and interest ₹6.6 Cr/quarter eating into earnings. New hospital drag expected to persist 12-18 months before breakeven-to-ramp transition.
Occupancy ramp uncertainty in new hospitals
MediumNew hospitals (Delhi Model Town, Faridabad Sector 20) operating at low occupancy percentages (29% and 49%) due to census bed expansion rather than strong demand. Faridabad at breakeven with 4-5% EBITDA margin; occupancy recovery to 70%+ will take 12-18 months per management guidance. Delay in occupancy ramp would extend breakeven timeline.
Debt and leverage elevation
MediumDebt increased from ₹210 Cr to ₹300 Cr (43% increase) for Gurgaon acquisition. Management states comfort up to 2x trailing EBITDA (~₹180-190 Cr based on EBITDA ₹91.7 Cr/quarter), implying current leverage above comfort zone. If EBITDA growth stalls or interest rates rise, debt service burden will increase further, limiting capex flexibility.
Government payer regulation and price capping risk
MediumPanel recommendation on capping hospital room charges to 3-star hotel rates could impact ARPOB, especially in older hospitals with higher government mix (40% of revenue). New hospitals insulated (9-10% government mix), but older Noida/Jhansi units vulnerable. Management downplayed risk citing historical precedent (stent, implant capping), but regulatory environment remains uncertain.
Capex inflation and cost overruns
LowCapex per bed increased from ₹30.7 Lakh (historical) to ₹61.4 Lakh (recent) to ₹75-80 Lakh (guidance for next 1,800 beds). Gurugram at ~₹1 Cr per bed—well above guidance. Land inflation, equipment, and brand positioning driving costs higher. If trend continues, 1,800-bed capex could exceed current assumptions by ₹500-1,000 Cr.
Management
Score 7/10. Management transparent on capex drivers, depreciation burden, and interest costs; candid that Q1 EBITDA margin missed guidance. Some deflection on occupancy accounting (census bed expansion justification). Limited detail on government mix volume trajectory—attributed to CGHS rate revision but did not quantify unit volumes. Acquisition playbook validated: Faridabad breakeven in 9 months (beat 12-14 month guidance), Agra EBITDA margin improvement from 11% to 20-23%, newer hospitals tracking to ₹50k ARPOB. Revenue growth tracking well ahead (52% vs 36% prior). One miss: EBITDA margin at 23.3% vs 24-25% guidance; attributed to depreciation/interest, not operational miss.
1 · Q3-Q4 FY27
Model Town Delhi breakeven; Faridabad Sector 20 margin expansion above 5%
2 · Q1 FY28
Gurugram 250-bed hospital goes live; expected ₹50k+ ARPOB
3 · Next 15-18 months
Noida cluster brownfield 450 beds operational; incremental 22-23% EBITDA margins
The company is in a capacity-building phase; near-term margins will remain pressured, but the long-term case (5,000 beds in 2.5 years, newer hospitals targeting 25-27% EBITDA margins by FY28-29) remains intact if execution holds.
Record revenue, margin miss — capex drag to persist 12–18 months
Revenue surged 52.3% YoY to ₹392.7 crore, far exceeding the 36% prior guidance. But EBITDA margin missed at 23.3% vs 24–25% target, and PAT growth stalled at 8% despite the revenue beat. Depreciation of ₹29 crore per quarter—capex-driven—is masking operational leverage and will press near-term profitability until new hospitals reach maturity.
₹392.7 Cr
+52.3% YoY; beat 36% guidance
23.3%
vs 24–25% guidance; ₹91.7 Cr EBITDA
₹45.4 Cr
+8% YoY; PAT growth lagged
On the headline numbers, Yatharth delivered a blowout quarter: revenue growth of 52% crushed the prior 36% guidance by nearly half. But dig into profitability and the quarter reveals a different story. EBITDA margin compressed to 23.3% from the 24–25% guidance band, and net profit growth crawled to 8% despite a 52% revenue surge. The gap between what the top line did and what profits did is the story of the quarter—and it traces to one number: ₹29 crore in depreciation per quarter.
Where the profit really stands
Reported PAT of ₹45.4 crore is the headline. But depreciation of ₹29 crore per quarter and interest of ₹6.6 crore are eating into the profit line far more than they did a year ago. Add depreciation back to understand what the operations themselves are generating: cash profit (PAT + D&A) reached roughly ₹74.4 crore, up 32% YoY. The operational leverage is there. The problem is that capital intensity—a deliberate choice—is masking it.
Management's claims—what holds up
Record revenue growth of 51% YoY and EBITDA growth of 39% YoY
SupportedRevenue ₹392.7 Cr (+52.3% YoY); EBITDA ₹91.7 Cr at 23.3% margin
Group will maintain consolidated EBITDA margin guidance of 24–25%
OverstatedQ1 delivered 23.3%, below guidance band
PAT and profitability have improved meaningfully with operating leverage kicking in
ContradictedPAT growth 8% YoY despite 52% revenue; margin compression evident
Faridabad Sector 20 achieved EBITDA breakeven in record 9 months with ₹12–13 Cr monthly revenue and ₹40k ARPOB
SupportedOperational milestones confirmed; margin at 4–5% at breakeven stage
New Delhi and Noida Extension hospitals crossed ₹50,000 ARPOB mark for first time
SupportedBoth units exceeded ₹50k ARPOB as stated
What changed on this call
Management crystallized four shifts that upgrade the long-term playbook but don't resolve near-term profitability pressure. The 5,000-bed timeline accelerated to 2.5 years from 3 years—3,200 beds already announced or under construction. New hospital profitability is outpacing assumptions: Faridabad reached breakeven in 9 months vs 12–14 months expected; Agra is at 20–23% EBITDA margin vs 11% baseline. Payer mix strategy is now explicit: new hospitals are capex per bed confirmed at ₹75–80 lakh for the next 1,800 beds, up from ₹30.7 lakh historical, driven by land inflation and oncology equipment (₹15–20 Cr per LINAC).
Revenue beat 36% prior guidance; 52% YoY growth is exceptional
Acquisition playbook outpacing timeline (Faridabad 9 vs 12–14 months)
New hospitals at ₹40–50k ARPOB show pricing power vs ₹35k group average
Cash profit up 32% YoY confirms strong operational leverage
EBITDA margin missed 24–25% guidance; delivered 23.3%
PAT growth 8% despite 52% revenue—profitability lag is real
Depreciation ₹29 Cr/Qtr and interest ₹6.6 Cr/Qtr will persist 12–18 months
Debt at ₹300 Cr is above management's 2x EBITDA comfort zone
New hospital occupancy (Delhi 29%, Faridabad 49%) unproven at scale
Risks, ranked by how much they should concern a holder
Profitability lag and earnings-quality deterioration
HighPAT growth of 8% despite 52% revenue is a red flag. Depreciation ₹29 Cr/Qtr and interest ₹6.6 Cr/Qtr are structural headwinds that will press consolidated PAT margins to 10–12% for 12–18 months. Earnings-downgrade risk if new hospitals don't ramp faster than guided.
New hospital occupancy ramp-up uncertainty
HighDelhi at 29%, Faridabad at 49% occupancy (accounting for census bed expansion). If occupancy stalls below 60–70%, breakeven timelines extend and new hospital EBITDA margins cap at 15–20% vs 25–27% guidance. This directly impacts FY28–29 margin recovery.
Elevated debt and leverage above comfort zone
MediumDebt increased from ₹210 Cr to ₹300 Cr (43% jump) for Gurgaon acquisition. Management targets 2x trailing EBITDA (~₹180–190 Cr), but current leverage is above that. Interest ₹6.6 Cr/Qtr is now structural; limits capex flexibility if rates rise or EBITDA growth stalls.
Government payer regulation (room-rate capping proposal)
MediumPanel recommendation on capping hospital room charges to 3-star hotel rates could dampen ARPOB in older hospitals (40% govt mix). New hospitals insulated (<10% govt), but exposure exists in Noida and Jhansi units. Management downplayed but offered no contingency.
Capex cost inflation and per-bed economics deterioration
MediumCapex per bed rose from ₹30.7 Lakh (historical) to ₹61.4 Lakh (recent) to ₹75–80 Lakh (guidance). Gurugram at ~₹1 Cr/bed. If trend persists, 1,800-bed capex could exceed current assumptions by ₹500–1,000 Cr, straining debt capacity.
How the street is positioned
The stock opened at ₹898.75 on result day and fell 3.68% on day 1, fading further to −5.97% by day 3 and −6.22% by day 5. This decline confirms the market's view: the margin miss and PAT lag are not accounting artifacts—they are real operational headwinds that will pressure earnings for the next 12–18 months. The stock is now 7.12% below its all-time high of ₹919.5 but still +58.66% off its 52-week low, showing it remains above fair-weather support. RSI at 56.2 is neutral (not overbought or oversold), suggesting the decline has room if risk sentiment sours.
On the ownership front, institutions are positioned cautiously. FII holdings ticked up 0.37 percentage points to 5.62% quarter-on-quarter—modest buying—but DII trimmed 1.16 percentage points to 10.84%, suggesting domestic institutions are taking profits or awaiting clarity on new hospital ramp-up. Promoter holdings stable at 55.80%. The net message: no capitulation, but also no conviction buying. The street is waiting to see whether Q2–Q3 can stabilize EBITDA margins and new hospital EBITDA margins recover toward 20%+ territory.
1 · Q3–Q4 FY27: Model Town Delhi and Faridabad margin trajectory
Watch for both units to approach 15–20% EBITDA margins. Occupancy should cross 50% at both locations by year-end if ramp-up assumptions hold. This is the key proof point that validates management's 25–27% EBITDA guidance by FY28–29.
2 · Q1 FY28: Gurugram 250-bed hospital operational; consolidated EBITDA margin recovery
Expected to go live with ₹50k+ ARPOB. Watch for consolidated EBITDA margin to begin recovering toward 24%+ as depreciation burden from Gurgaon capex shifts to revenue contribution. This is the inflection point for profitability.
3 · FY27 ongoing: One new acquisition in capital cities (Rajasthan, Haryana expected)
Watch for debt-to-EBITDA impact and capex-per-bed for the new asset. If capex exceeds ₹75–80 Lakh/bed guidance, cost inflation is more severe than assumed.
Yatharth delivered exceptional revenue growth (52% YoY, beat 36% guidance) and is executing its acquisition-and-consolidation playbook faster than expected. The operational momentum is real: cash profit up 32% YoY shows the underlying business is strong. But the quarter also delivered a profitability stumble—PAT growth of only 8% despite 52% revenue is a red flag. This is not a fundamental break in the model; it is a near-term earnings headwind from capex-driven depreciation (₹29 Cr/Qtr) and rising interest costs (₹6.6 Cr/Qtr) that will press results for 12–18 months.
The honest read is this: Yatharth is in a capacity-building phase. The long-term case (5,000 beds, ₹50k+ ARPOB, 25–27% new hospital EBITDA by FY28–29) remains intact IF execution holds and new hospital occupancy ramps to 70%+ by mid-2027. But near-term profitability recovery is no longer a given. The market's 6% 5-day slide is justified.
Rating: Hold. The revenue growth and acquisition playbook are ahead of plan. But profitability recovery will lag expectations, and the street needs proof that new hospitals can deliver the margin uplift management expects. Wait for Q2–Q3 EBITDA margins to stabilize above 23% and new hospital unit EBITDA margins to approach 15%+ before raising conviction. The number to track from here: consolidated EBITDA margin. If it holds 23%+ through FY27 and new hospital EBITDA margins move toward 20%+, the long-term case gains credibility. If EBITDA margin slips below 23%, earnings estimates will come down sharply, and the stock may test its lows.