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Check Before You Invest : Sharma East India Hospitals & Medical Research Ltd

BSE: 524548 NSE: ISIN: INE465H01012
  |   Sector:  Healthcare   |   Industry:  Hospital & Healthcare Services

Snapshot

Q.1 Which industry/sub-sector does Sharma East India Hospitals & Medical Research Ltd belong to?
Sharma East India Hospitals & Medical Research Ltd belongs to the Healthcare sector, operating specifically within the Hospital & Healthcare Services segment.
Q.2 Is Sharma East India Hospitals & Medical Research Ltd a good quality company?
Sharma East India Hospitals & Medical Research Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Sharma East India Hospitals & Medical Research Ltd undervalued or overvalued?
Sharma East India Hospitals & Medical Research Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 26.69 -
Price to Book 2.61 -
Price to Sales 0.92 -
EV to EBITDA 9.53 -
Q.4 Is Sharma East India Hospitals & Medical Research Ltd a good buy now?
Sharma East India Hospitals & Medical Research Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Sharma East India Hospitals & Medical Research Ltd?
Sharma East India Hospitals & Medical Research Ltd revenue growth is 61.3% for FY-2025, which is above its 5-year CAGR of 13.06%, indicating faster growth.

Q.2 Gross Profit margin of Sharma East India Hospitals & Medical Research Ltd?
Sharma East India Hospitals & Medical Research Ltd Gross profit margin which is the profit after deduction of direct costs, is 10.9% for FY-2025, which is in line with its 5-year median of 10.9%, indicating stable margins.

Q.3 Operating Profit Margin of Sharma East India Hospitals & Medical Research Ltd?
Sharma East India Hospitals & Medical Research Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 12.22% for FY-2025, which is in line with its 5-year median of 12.22% indicating stable margins.

Q.4 Net Profit Margin of Sharma East India Hospitals & Medical Research Ltd?
Sharma East India Hospitals & Medical Research Ltd Net Profit Margin is 4.17% for FY-2025, is in line with its 5-year median of 4.02%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 10.9 10.9
Operating Profit Margin (%) 12.22 12.22
Net Profit Margin (%) 4.17 4.02

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Sharma East India Hospitals & Medical Research Ltd?
Sharma East India Hospitals & Medical Research Ltd Return on Asset is 4.71%, which is above its 5-year historical median of 3.59%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Sharma East India Hospitals & Medical Research Ltd?
Sharma East India Hospitals & Medical Research Ltd Return on capital employed is 13.87% for FY-2025, which is above its 5-year historical median of 11.1%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Sharma East India Hospitals & Medical Research Ltd?
Sharma East India Hospitals & Medical Research Ltd Return on equity is 11.5% for FY-2025, which is above its 5-year historical median of 8.27%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Sharma East India Hospitals & Medical Research Ltd?
Sharma East India Hospitals & Medical Research Ltd Cash conversion cycle is 7 days, in line with its 5-year historical median of 7 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.13 0.9
ROE (%) 11.5 8.27
ROCE (%) 13.87 11.1
Cash Conversion Cycle 7 days 7 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Sharma East India Hospitals & Medical Research Ltd?
Sharma East India Hospitals & Medical Research Ltd Debt-to-Equity ratio is 0.19, which is lower the industry average of 0.20, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Sharma East India Hospitals & Medical Research Ltd?
Sharma East India Hospitals & Medical Research Ltd Debt to cash flow from operations is 0.34, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Sharma East India Hospitals & Medical Research Ltd?

Q.1 Promoter shareholding and pledge status of Sharma East India Hospitals & Medical Research Ltd?
Promoters hold 53.63% of the Sharma East India Hospitals & Medical Research Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Sharma East India Hospitals & Medical Research Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Sharma East India Hospitals & Medical Research Ltd vs industry peers?
Sharma East India Hospitals & Medical Research Ltd revenue CAGR is 13.06%, compared to the industry median CAGR of 1.38%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 61.3 1.4
Gross Profit Growth (%) 31.1 18.5
Operating Profit Growth (%) 0 15.4
Net Profit Growth (%) 87.9 23.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.13 0.73
ROE (%) 11.5 13.88
ROCE (%) 13.87 17.77
Cash Conversion Cycle (days) 7.28 1

Valuation & price assessment

Q.1 Stock return of Sharma East India Hospitals & Medical Research Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of 32.49% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - 32.5%
Q.2 Valuation ratios of Sharma East India Hospitals & Medical Research Ltd vs historical?
The current P/E ratio of 26.69 is higher than its historical median of , indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 26.69 - 37.25
Price to Book 2.61 - 3.64
Price to Sales 0.92 - 4.21
EV to EBITDA 9.53 - 17.66

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