Jeena Sikho Lifecare Ltd Q2 FY2025 Concall Summary

Key Takeaways

• Revenue grew 36% YoY to INR214 crores, driven by a 72% surge in hospital services, which now account for 53% of total revenue, up from 42% last year.
• Occupancy jumped to 51% in H1 from 38% last year, fueled by a landmark Supreme Court order on Ayushman Yojana and a new GIPSA tie-up that unlocks cashless insurance for government scheme patients.
• The patient funnel is accelerating rapidly: 12,000 patients were admitted in H1 FY25, nearly matching the 13,000 admitted in all of FY24, with 80% arriving after being disappointed by allopathic treatments.
• Management committed to INR450 crores revenue with a 25% PAT margin for FY25, and outlined a path to INR1,000 crores by FY28, underpinned by a bed count target of 2,100 by March and 5,000 in 3-5 years.
• What to watch next quarter: The pace of new hospital openings across 20+ cities, the conversion of 16 pending insurance companies to cashless, and any government action on the Supreme Court's 3-week deadline to include Ayurveda in Ayushman Yojana.

The Ayushman Yojana & Insurance Catalyst

• Supreme Court order is a potential watershed: 4 days before the call, the court ordered the government to include Ayurveda in Ayushman Yojana within 3 weeks, a move management says would force a very rapid bed expansion.
• GIPSA tie-up signed: An agreement with all four government insurance companies was finalized 4 days ago for all NABH hospitals, opening a direct channel to government scheme patients.
• Cashless insurance network is scaling: 11 private insurers are now cashless, with one or two new companies joining every 10 days; 16 companies remain pending.
• Insurance is changing the payer mix: Government revenue rose from 12% in FY22-23 to 24% in H1 FY25, while the April 2024 mandate for cashless Ayurveda is bringing more health insurance patients.
• Cashless money comes in 10 days, improving working capital dynamics versus the reimbursement cycle.

Manish Grover: "4 days ago, the Supreme Court ordered the Indian government to include Ayurveda in the Ayushman Yojana. So, if you have seen the news 4 days ago, the Supreme Court has ordered the government and state government to include Ayurveda in the Ayushman Yojana and they have given 3 weeks to the government. If that happens, then I will expand the number of beds very quickly."

Hospital Services: The Growth Engine

• Hospital revenue grew 72% YoY to INR114 crores, making services the majority of the business at 53% of total revenue, up from 42% last year.
• Patient volume is accelerating: 12,000 patients were admitted in H1 FY25, compared to 5,700 in all of FY22-23 and 13,000 in all of FY24, putting the company on track to nearly double annual admissions.
• Occupancy improved from 38% to 51% in H1, with the base effect of 300 beds added in the last month of the previous year now absorbed; management says occupancy would be 70% if beds were not still being added, and the target is 80%.
• Revenue per bed per day rose to INR8,100 from INR7,900 last year and INR6,100 in FY22-23; management expects INR8,500-INR8,700 but will cap it below INR9,000 to keep services affordable.
• The model is process-driven, not doctor-driven: all 411 doctors are on payroll, protocols are fixed for each condition, and a flat daily rate covers all 85+ therapies without extra charges.
• 80% of patients come after being disappointed by allopathy, told they need chemotherapy, radiotherapy, surgery, dialysis, or transplant; the company uses allopathic diagnosis but Ayurvedic treatment, a model it claims is the only integrated one in India.

Manish Grover: "Sir, 80% patients come to us after being disappointed. I mean, they have come from there. The 80% patients we have, they did not get the solution there. Either they were told chemotherapy or radiotherapy or surgery, if it is a cancer patient. If it is a kidney failure, then they were told dialysis or transplant. After that, they come to us."

Bed Expansion & New Hospital Pipeline

• Bed count target raised: the company now plans 2,100-2,200 beds by March 2025, up from an earlier estimate of 500-600, with a path to 3,000 beds next year and 5,000 in 3-5 years.
• NABH-accredited beds grew from 24 to 33 in six months, with 4 more expected this month, bringing the total to 37; NABH accreditation is the gateway to insurance and government scheme reimbursement.
• New hospitals are starting across 20+ cities in the next six months, including Nagpur, Gorakhpur, Guwahati, Goa, Bhopal, Siliguri, Ranchi, Bhubaneswar, Jammu, Jabalpur, Raipur, Cuttack, Hyderabad, Pune, Prayagraj, Alwar, and Delhi.
• Panchkula hospital ramp-up is a proof point: monthly sales grew from INR23 lakhs in the first month to INR50-51 lakhs, already exceeding Patanjali's INR32 lakhs at the same location.
• After reaching 5,000 beds, the plan is to acquire a large 10,000-bed hospital; the company is already searching in Chennai and Bangalore.
• International expansion is starting: setups in Nepal and Dubai are underway, with a Dubai agreement expected within the month; Saudi Arabia, Vietnam, Mauritius, London, America, Australia, and New Zealand are on the roadmap, starting with day care centers.

OTC & Medicine Business Evolution

• Product sales grew only 10% to INR100 crores, a sharp contrast to the 72% hospital services growth, as the mix shifts decisively toward services.
• OTC launch is imminent: a 6-month trial is complete, dealers are appointed, and the first phase will cover Punjab and UP with 12 products, including Shilajit, kidney detox, and liver detox; the launch will proceed state by state, not nationally.
• 7 clinical trials are complete for blood pressure, diabetes, kidney, liver, migraine, constipation, and hair products; 5-6 products are awaiting ICMR approval, with 3 names already received from the government.
• Loan license manufacturing is operational: two licenses were taken with a factory in Amritsar that built an exclusive unit for Jeena Sikho, enabling production in the company's name with no capex.
• Management is deliberately avoiding competitive red oceans: the OTC products have no existing market competitors, and the company will not compete with classical medicine players like Baidyanath, Dabur, or Patanjali, whose products carry 5% GST.
• The medicine philosophy is built on differentiation: patent medicines with no preservatives, no chemicals, shorter expiry, and patient-based treatment with diet guidance, creating a model where patients become lifelong referrals.

Manish Grover: "I have taken a vow that I will not go in red ocean. Why do I go in jungle and fight with people. I am not getting into competition. The products which I am getting from OTC have no product in their market. We are single person and single company."

Oregano Life Acquisition & Inorganic Strategy

• Oregano Life was acquired in October for INR70 crores in cash, with the entire team retained and top performers given more responsibility and ESOPs.
• The acquisition strategy targets multiples of 5-7x and also includes a revenue-sharing model where the company takes management rights and payment receiving rights without upfront capital, having visited 5-6 hospitals in the last six months under this structure.
• Discussions are ongoing at 3-4 places for further acquisitions.

Financial Outlook & Margin Trajectory

• FY25 revenue guidance is INR450 crores with a 25% PAT margin; FY26 is targeted at INR650-700 crores, and FY28 at INR1,000 crores.
• PAT margin has improved steadily: from 6% in FY21-22 to 16% in FY22-23 to 21% in FY23-24, with the current six-month run rate at 21-23%; management targets 27-30% for FY26.
• FY26 guidance includes international sales, with OTC sales treated as incremental upside; Dubai and Middle East pricing is expected to be higher, with Shirodhara at INR3,000-3,200 versus INR1,500 in India.
• No external funding is needed for the foreseeable future unless a tie-up requiring a factory plus product materializes; otherwise, growth will be funded internally.
• Main board listing is planned: the company will apply in March and expects to be on the main board by June FY25; a dividend policy is in place, but a bonus is not possible before the main board due to government norms.
• E&Y has been engaged for a management review and is signing as the state auditor for the main board transition.

Manish Grover: "My target is not to charge more from the customers. I want to provide affordable services and good facilities to people in less money. And despite this, I am getting good margins."

Guidance & Commitments

Key Metrics