With market cap of ₹3,300 crore, Medi Assist eyes improved profit margins

Bengaluru-based Medi Assist Healthcare Services, expects better profit in the next three to four quarters once its latest acquisition, Raksha TPA, is integrated into the main business.

In the first six months of the current financial year (FY24), Raksha TPA (fully acquired in March 2023) made ₹6.4 crore in revenue, of Medi Assist’s total ₹301 crore.

The other two subsidiaries are Medi Assist TPA, which accounted for ₹271.4 crore in revenue, and Medvantage TPA that made ₹2.96 crore in the same period.

Medi Assist listed on the stock exchanges on January 23, currently has a market capitalisation of over ₹3,300 crore. The stock has gained a little over 5% since listing.

The margin on earnings before interest, tax, depreciation and amortisation (EBITDA) was 20.4% for the three months ended December 2023. The number is almost the same at 20.6% for the nine months of the financial year so far.

The investor presentation highlighted the fact that both EBITDA and the profit margin have grown despite the added costs of acquisition and some intangible provisions written off.

In a post-earnings conversation with CNBC-TV18, Satish VN Gidugu, CEO and whole-time director of Medi Assist said that it currently derives around 9.5% of its revenue from government contracts, and 6% from the international business acquired a year ago.

80% of the remaining revenue comes from group insurance and the remaining 20% from individual customers.

Medi Assist’s revenue from contracts with customers in Q3 was up 32% year-on-year (YoY) at ₹166 crore.

Total income for the quarter rose 29% to ₹170 crore year-on-year. Total expenses jumped 42% to ₹144 crore and profit after tax was down 2% to ₹21.2 crore compared to a year earlier. CNBCTV18