+1. For the same reason I avoided this company.
Disc: Not invested. But tracking since last 6 months.
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For FY 22-23, the company’s auditors are G.P. Kapadia & Co. It is a very reputable CA firm and we can trust that the financial statements are genuine.
Remember PWC was auditor of Satyam Computers! However strong auditors are, there are limitations. They depend on data provided by company. I’m by nature a bit skeptical about these kind of things 
Look at these these disclaimers by the auditor:
Who audited their subsidiaries??? 
So now whom we depend upon? on management- who are they? I couldn’t find enough on them, their history or on their family/credibility!
The only variable basis which now I can mitigate this risk is “time”. So i’ve to see their performance for next few quarters/years.
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As far as I know both of them are doctors and are first generation businessmen who are in their mid 30s and started this business originally medical tourism consultant in Africa when they were quite young.
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H1FY25:
• Revenue growth: 10.5%. EBITDA growth: 20% - EBITDA margins: 37.2%. PAT growth: 23%
Borrowings reduced to 10.23cr vs 15cr in March 24. (Net cash levels similar)
Operating cash flows of 5.76cr (7cr for FY24 full year)
• The Company, via UMC Hospitals Private Limited, intends to add a capacity of 150 to 250 commissioned beds across one or more tertiary care hospitals in India under its operational management in the coming 24-36 months. In line with the Company’s proposed plans to establish a pan-African presence and expand its existing bed capacity across Africa from 200 tertiary care beds to more than 500 commissioned beds in the coming 36 months, the Company had incorporated a wholly owned subsidiary, Unihealth Holdings Limited, in Mauritius. The said subsidiary intends to make investments to acquire as well as invest into setting up of facilities in line with the Company’s vision and growth plans, in key target countries of Africa.
• Looking forward, we’re ambitious about our expansion plans, which include the development of over 1,000 tertiary care hospital beds across Africa and India and the establishment of more than 25 UniHealth Medical and Diagnostic Centres
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(Consultancy revenues have dipped for current HY)
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CONCALL NOTES:
• EBITDA MARGINS DETAILS AND GUIDANCE: Operational efficiency contributed significantly to the increased EBITDA margin at both the hospitals. On a ground level as the revenues increase, in the hospital industry, the fixed costs to a large extent are capped at a particular break-even point. Beyond that, any growth in revenue usually translates into a higher margin because your cost towards employees, your cost towards the utilities or infrastructure is unlikely to increase in the same proportion.
Going forward, Existing operations might still witness another 1%-1.5% of growth as revenues increase. But on a consolidated basis, as we move towards an expansion mode where we will be adding on significant bed capacity in the coming 6 to 24 months as we inch towards our intended 1,000 beds, all the new addition might be at a lower EBITDA during the first 12 to 18 months while we build on the operations for those facilities. So, on a consolidated level, going forward, either we will be maintaining this EBITDA, or the EBITDA margins are likely to come down by a couple of percentage points while the overall revenues and EBITDA in real absolute numbers will increase considerably as we add on additional beds that we intend to do so.
• NEW FACILITIES/CAPACITY EXPANSION: Company is in advanced discussions for a couple of facilities, which we aim to conclude before the end of this financial year, in a sense that these facilities should be commissioned and operational in the last quarter of the ongoing financial year. We are quite confident of adding another 100 beds to the existing capacity of 200. This is equally positioned in India and Africa. So, for this financial year, we will be adding a 50- bed strength in India and a 50-bed capacity in Africa. Both these are completely new set-ups that we are having for the 50-bed in India. It’s going to be our first facility in India and the other 50-bed that we are looking at is in Tanzania. So, the India one is a pure Greenfield. Tanzania, we have got ongoing discussions with two different facilities. One is a sort of acquisition, and the other one is relatively, I wouldn’t say a clear Greenfield, but it’s midway, where we will be entering, but it does not have an established revenue stream right now. Once we enter, post that, that commissioning phase will happen. So, the turnaround time will be smaller compared to a standard Greenfield, but it does not have an existing top line to contribute to the group on an immediate basis.
We will be increasing the beds in by about 50% by the end of this ongoing fiscal. From the 300 beds that we aim to have before the end of this fiscal, we will be adding another 250 to 300 beds in the next financial year. So, those discussions have also been initiated by the management. Hopefully, very soon we will be in a position to share significant details with all the stakeholders.
INDIA EXPANSION: India is right up there on the management’s focus of the additional capacity that we intend to plan in the coming 3 years. As we grow from a 200-bed strength to a 1,000-bed strength, we will be looking at developing a portfolio of at least 400 to 500 beds in India. The first target for us as we inch towards the 1,000-bed capacity would be to have at least a 400-bed capacity across 4 to 5 facilities in India. So, every single facility that we will be looking at in India is going to be in the range of 50 to 125 beds. That’s the ideal bed strength that we will be looking at as an individual facility in India. So, in the coming 3 years, we will be looking at setting up 5 to 6 facilities with a combined bed strength approximately around 400 beds in India.
NIGERIA EXPANSION: When it comes to Nigeria right now, our presence is in Northern Nigeria in Kano. So, as the first step, we are exploring Lagos, which is the commercial capital of the country and Abuja, which is the political capital of Nigeria. Both those are locations where we can put up a 50 to 75 bed hospitals. We have already started the process to identify the right property for this expansion. That will be step one, which will allow us to provide access to a larger population base of the country to our services.
In Nigeria, we are now looking at expanding our presence by establishing facilities in Lagos and Abuja. So, the bed strength from 80 bed capacity, we are inching towards the 200-bed capacity in the coming 12 to 36 months, as in when the right opportunity comes in.
TANZANIA EXPANSION: The idea is in the coming 2.5, 3 years to have an established bed strength of about 200 to 250 beds in Tanzania across 3 to 4 cities of the country that we are exploring opportunities in. These include the commercial capital that is Dar es Salaam, Mwanza, which is in the Lake region and the second largest and most populated city after Dar es Salaam. Then the other two cities under consideration are the political capital of the country Dodoma and a city called Arusha, which is basically the gateway to all the tourist attractions of the country. So, these four geographies we have earmarked to explore opportunities to set up a bed capacity of about 200 to 250 beds in Tanzania.
• For the next year, there is another 300-bed capacity. For that, you may need a fund, which will call for a fundraising exercise. Akshay Parmar: Quite possibly, it depends upon, so we have got multiple discussions ongoing, both in India and Africa. Some of them may need some additional funding in terms of an acquisition. Some are more on the O&M aspects, where we will be taking those facilities on a long-term lease or come operational contracts. So, out there, the requirement is more so towards the funding of equipment purchase and operational capital, which we have the liberty to access bank debts as well. So, in that case, we may not need to go back to the public for a fund raise for those particular projects. So, it is going to be a mix and the clear idea will be available only by the last quarter of this financial year.
• NAME CHANGE TO UNIHEALTH HOSPITALS LTD: As a management, what the benefit that we foresee in the coming period is that we get better grouped under the healthcare category with the right kind of peers for the public stakeholders. So, there may be a lot of individual stakeholders where that dilemma, whether we are a hospital group or whether we are consultants to the hospitals does arise because of the name. Once we get grouped, typically if we look at the average PE multiple at which the healthcare industry, I mean the hospital industry right now is creating, that average PE is upwards of 50. So, as management, we do feel that by getting it under the right grouping, there is a possibility that the stakeholders will start viewing the company from a different perspective as well.
• MEDICAL TRAVEL DIVISION: We have re-entered the space earlier last year and going forward, the thought process is with hospitals across critical African countries and hospitals in India, it will become something which is going to be purely internal where we are going to achieve way better margins and provide way better services to our patients. So, a patient from a UMC Hospital in Nigeria will have the liberty to undergo treatment at UMC Hospital in India. For the group, it will improvise upon the margins. So, that is one of the arenas that we are looking at. It also helps us with a lot of corporate contracts that we have in these countries, clients like the United Nations, clients like the Ugandan military and defense forces. So, for them, it becomes a seamless experience because then they are not referring to a third party. They are referring to us as UMC Hospitals Group. So, the potential for us to increase that business becomes a reality when it is purely internal. So, from medical value travel, that is one major advantage that we are looking at. Then coming to geographies where UMC Hospitals do not have a presence. Since it has been the oldest vertical for the company, we have the expertise, we have the facilities and capacity with the management, and we have already started sequentially targeting some of those countries also, where traditionally we were receiving a lot of patients from. So, earlier, the margin for such a business would vary between 15% to 20% on a gross basis. But now with UMC Hospitals being one of the front runners for getting that patient base into India, and those patients will effectively be treated at one of the UMC Hospitals facilities in India, that margin will nearly double up. So, then we will be looking at a 40% plus margin on the same business that earlier would fetch us about 15% to 20%.
• Kenya and Ethiopia are two geographies that we are keenly looking at and exploring opportunities
• GROWTH GUIDANCE: What we witnessed in terms of percentage points for the first half, we are going to have a similar pattern for the second half, maybe a slightly better one because there are certain areas in terms of consultancy services where usually the second half of the year does much better than the first half for us on a historic basis. The same goes for the profits as well. The margins are likely to remain the same or witness a small increase in the second half of the year. So, by the end of the year, we will be maintaining the current growth rate or bettering it by a little.
• SYRINGE FACILITY: The construction of the entire structure has been completed. The equipment orders will now be placed with the target that they are all in place on site by the end of the financial year. We are targeting June 2025 for production to begin.
• We are looking at about 8 to 10 medical centers in the coming 18 months in Uganda, in the periphery of Kampala. So, anywhere in the radius of what two to three hours of drivable distance from the hospital that we already have. So, these will allow us a twofold benefit. One, it will allow us to provide services at a lower cost to the underserved population of the country. So, compared to the hospital, these centers will be better priced in terms of the economics. Second, these will also act as feeders or as spokes for the hospital where patients who need surgical intervention, who need intensive care services can then be referred to the main hospital in Kampala. So, that will also allow us to benefit from these kinds of references from within the network itself. So, this is the way forward that we are looking at Uganda.
• Some of these countries have a very good national health insurance already in place, like Tanzania, like Kenya. Countries like Uganda are in the process of establishing a national health insurance scheme. So, the Parliament has already passed the bill. The execution modality is underway, which might take maybe a year or two years more. But once that happens, a much larger population would be under the ambit of healthcare services, access to healthcare. So, from that perspective, being there or having a presence itself will allow us to benefit from the growth that the overall sector is likely to witness.
• MOBILE APP: In the coming six months, we are going to be looking at investing some amount into developing the technological aspect of the company to extend our services to a larger footprint or a larger audience via mobile apps. So, that is something that is a strategic investment that we will be making in the coming two quarters, so that by the time we start commissioning the additional bed capacity that we aim to, we have got this backend absolutely well-defined and ready to roll out.
• We have been tracking the healthcare sector and the industry in Kenya and key geographies in Kenya for us that are on the watch list include Nairobi, which is the capital city, include the port city of Mombasa and smaller places like Kisumu and Kakamega and Eldoret. So, these are the 5 cities and towns in Kenya that we have been tracking for the right opportunity to come to us.
• MANAGEMENT MINDSET ON MANPOWER AND QUALITY OF SERVICE: As a private company we started small, and both the promoters are from the field in terms that both of them are doctors. We have the educational background. So, that allowed us to create very, what you call, robust SOPs, protocols that have been put in place. Dr. Anurag relocated to Uganda from the same perspective that once we had a facility which was our flagship facility way back in 2016-17, we wanted to have some feet on ground which would ensure that all the protocols are implemented, and the quality perspective is well catered too. So, today for us luckily at UniHealth, we have got a very good bench strength of key senior managers and executives who have been trained and who have been working with us since a good number of years in different roles and capabilities and capacities. And they are the ones who will be spearheading the expansion as we take it forward.
Lastly, what is also critically important as we grow is that the manpower that joins the company sticks to it. And I am very happy to share with everyone on the call that for us the attrition rate has been extremely low. We have never had in the last 10 years any senior executive actually leave the company. Whatever attrition that we experience is primarily from our hospitals in Uganda and Nigeria at the entry point level, that is the nurses or the office boys or the technicians. We never really had any senior doctors or management people leave the company over the last 10 to 12 years of our existence. I mean, 14 years, but a lot of them have joined just about 10 years back. So, from that perspective, this also plays an important role in the work culture at UniHealth and will be extremely supportive of the growth that the company undertakes, because that is the time when this will be put to the real test.
So, for our Indian operations, very recently we have had Mr. Saurav Chatterjee join us as the Head of Operations. He has been a veteran in the industry, having worked with Fortis, having worked with Apollo, having worked with Wockhardt and having worked for about a decade or more with Aditya Birla Hospital in Pune in various leadership positions and roles. So, again, out here, the manpower plays a very, very important role.
• OPERTIONAL EFFECIENCY DETAILS: One important aspect was better management of the cost of inventory. So, over a period of time, especially post the tapping into the capital markets and having access to funds, we have been able to plan our exports from India in a much better and a streamlined manner, which has allowed us to reduce procurement locally for a lot of consumables where the pricing parameters are significantly different. So, we have been able to reduce our cost of inventory, which has added to our margins.
The second is that with access to capital, we have been able to plow in a significantly higher working capital in Uganda and tap into a lot of business that we had to earlier forego because of limited access to the funds. Now, what that has done is it has allowed us to increase our top line. And lastly, we have invested into developing certain Centers of Excellence like orthopedics, spine. We are focusing on minimally invasive procedures at laparoscopic surgery, which are higher margin procedures. We have got Indian doctors who are traveling every six to eight weeks to either of our facilities. And that has allowed us to increase our revenues at a much better margin in comparison to the same procedures being done by local doctors. So, that has also added to the increase in the EBITDA and PAT margin.
• RELATIONSHIP WITH LOCAL COMPETITORS AND DOCTORS AND GOVERNMENT: So, all these countries are fairly small in terms of the industry where we have got a very robust mechanisms of interdependency. Because we have very few private players in the industry out there in terms of hospitals. More than being competitors, we are sort of partners in the industry where we do lean on each other. So, there are times when we refer our patients to them when a particular service is down for maintenance in our facility. For example, an MRI machine or CT scan machine for maintenance may be down for a few days, a couple of days or maybe a little more in case any service part needs to be replaced. At that time, we refer patients to them and simultaneously they do and reciprocate the same way when their systems are down. Secondly, what happens is that we are the largest in both the sectors that we are there, in Uganda in the private sector and in Northern Nigeria in the private sector. We also have the largest intensive care facility. We have got modular theaters. So, many times, a lot of these smaller facilities that are there, they refer patients to us so that their patients can get access to the ICUs or their patients can get access to certain minimally invasive procedures that we are undertaking. So, it is a very healthy relationship that we have with a lot of local service providers in terms of the hospitals in these countries.
When it comes to doctors, a lot of local doctors are on an honorary basis. They are honorary consultants. So, they practice at our facility. They also practice at other facilities. So, they are not bound, but once they have been used to our way of functioning, a majority of them end up practicing for 70% to 75% of their time and patient base at our facility because of the infrastructure that we have created and the support system that they have in terms of a lot of facilities and access to a lot of inventory items, which otherwise sometimes are difficult to get in smaller setups in these countries. So, that is the way that we have been liaising and networking and cooperating with the healthcare providers.
When it comes to government, again, we have a very good way of liaising with the government. We are constantly in touch with different departments. We provide our services to a lot of departments, and we are also very forthcoming in sponsoring healthcare services for a lot of events that some of these departments have. For example, when the Sports Ministry undertakes any sports activities in Uganda, we are more than happy to extend our ambulances and a small clinical team to be present on ground on a pro bono basis. Similar activities we undertake in collaboration with the Rotary, where we take part in organized cancer runs to create awareness. Similarly, in Kano also, we extend our services to the airport authorities, to the police force of the city. So, by doing these activities and extending our facilities and services to them, we have been able to create an extremely good rapport with the different government departments out there.
THINGS TO TRACK:
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ADDITION OF FACILITIES AND THEIR PERFORMANCE
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PROGRESS IN INDIAN MARKET: Can they replicate their success of African markets in Indian markets as market dynamics are very different between the two? What will be the EBITDA margins of Indian operations?
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SYRINGE FACILITY PROGRESS
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CONSULTANCY DIVISION PERFORMANCE
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CURRENCIES OF NIGERIA AND UGANDA
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UMC Hospitals Group announces its First
Multi-Specialty Hospital in India.
https://nsearchives.nseindia.com/corporate/UNIHEALTH_07012025155038_Cvandpressrelease_merged.pdf
Got a couple of questions
1.- They claim many Indian hospital chains tried to enter African markets but were unable to do so. What was the reason? What did the big companies lack that this small company can exploit and use it to its own advantage?
2. They claim they can reduce their costs on inventory and equipment as compared to others by exporting from India. I did not understand this. Why can’t their competitors do the same and exploit the same advantage?
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Management has significant knowledge of the African markets, also they have tie-up with local partners in all their hospitals which helps them with administrative and other matters.
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Costs are just mostly a case of sourcing items from lower/lowest supplier which in this case is mostly from India most of which is via trading but they are now in the process of setting up disposable injections facility in Tanzania thus moving up from trading gradually based on market opportunities.
*views expressed are from my limited understanding of the company and whatever little i have researched and read online.
Disclosure: No positions but tracking
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