Research Reports

Jeena Sikho Lifecare Share Price Target Long Term Recommendation: Buy, Sell or Hold?- Edelweiss

Edelweiss

16 May 2024

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Edelweiss Brokerage recently released stock research reports on Jeena Sikho Lifecare, focusing on share price targets, along with Long Term Recommendation, featuring buy, hold, and sell and potential upside. Let’s delve deeper into their recommendations for Jeena Sikho Lifecare Share Price Target.

Jeena Sikho Lifecare Share Price

In 2017, Acharya Manishji, also known as Mr. Manish Grover, founded Jeena Sikho Lifecare (JSLL). Since then, this company has become one of India’s leading Ayurvedic healthcare providers. Acharya Manishji has been a strong promoter of Ayurvedic products and services since 2009.

The company aims to tap into the growing market of Ayurveda, yoga, naturopathy, unani, siddha, and homoeopathy (AYUSH). With a fast-expanding network of clinics and hospitals, JSLL is well-positioned for significant growth in the alternative medicine sector.

Rapid Expansion and Growth

From a modest beginning, JSLL has rapidly grown its presence across India. By March 2024, the company had increased its bed capacity to about 1,300 across 27 Panchakarma hospitals and 30 daycare clinics.

This is a significant leap from just 55 beds at a single hospital in 2020. With an average occupancy rate of around 35% in 2023, the company plans to increase this to 55% within the next two years. JSLL aims to further expand its bed capacity to about 2,000 by 2026.

Financial Performance and Projections

The company has shown impressive financial performance. From 2019 to 2023, JSLL posted a revenue growth rate (CAGR) of 18% and a profit growth rate (CAGR) of 54%. In the first half of 2024, the company’s revenue and profit grew by 82% and 184%, respectively.

This strong performance is expected to continue, with a projected revenue growth rate (CAGR) of 41% and a profit growth rate (CAGR) of 60% from 2023 to 2026.

Strong Balance Sheet and Asset-Light Model

JSLL operates on an asset-light model, meaning most of its hospitals operate under long-term leases rather than being owned. This model, along with a strong balance sheet, has helped JSLL maintain financial stability. As of September 2023, the company had a net cash reserve of INR 48 crore and was debt-free.

It is expected to generate a free cash flow of INR 293 crore over the period from 2024 to 2026. This financial health is further demonstrated by the company’s return on equity (RoE) and return on capital employed (RoCE), which are projected to average 39% and 50%, respectively, over the same period.

Retail Products Business

JSLL’s retail products business is also thriving. With over 300 products, the company focuses on over-the-counter (OTC) products that treat a variety of diseases. The company’s commitment to innovation and product launches has driven its success.

The sale of these products is expected to see a revenue growth rate (CAGR) of 20% from 2023 to 2026, building on the INR 141 crore revenue reported in 2023.

Valuation and Market Position

Given the favorable market conditions, the strong reputation of its promoter, and the company’s efficient execution, JSLL is in a strong position for future growth. The stock is currently trading at 27 times its expected earnings for 2025 and 20 times for 2026.

Based on these projections, we have assigned a price-to-earnings (P/E) ratio of 30x on the company’s expected earnings for 2026, arriving at a target price of INR 1,650 per share.

Jeena Sikho Lifecare Share Price Target

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