Forensic Analyst, Trudence Capital Advisors

Nitin Mangal

Forensic Analyst

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Forensic Accounting

Narayana Hrudayalaya Ltd / Forensic Accounting

<a href="https://www.smartkarma.com/entities/narayana-hrudayalaya-ltd" target="_blank" data-smartkarma-citation="entities:26939:1" rel="noopener">Narayana Hrudayalaya Ltd (NARH IN)</a> or NHL is a player in healthcare service sector. As at F21, the company operated as many as 46 healthcare facilities having a total of 6,725 bed capacity. It also has one operational hospital in the Cayman Islands.
NHL may be a big player in hospital chains, but the review of annual report provides us with several concerns on the balance sheet side such as poor investment quality, doubtful receivables, etc. Also, NHL in the past has shown very poor execution record which might depict concerns at a strategic level.

Narayana Hrudayalaya Ltd (NARH IN) or NHL is a player in healthcare service sector. As at F21, the company operated as many as 46 healthcare facilities having a total of 6,725 bed capacity. It also has one operational hospital in the Cayman Islands.
NHL may be a big player in hospital chains, but the review of annual report provides us with several concerns on the balance sheet side such as poor investment quality, doubtful receivables, etc. Also, NHL in the past has shown very poor execution record which might depict concerns at a strategic level.

Forensic Analysis- Narayana Hrudayalaya Ltd

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

On 6 May 2021, Bloomberg reported that <a href="https://www.smartkarma.com/entities/mitsui-co-ltd" target="_blank" data-smartkarma-citation="entities:20799:1" rel="noopener">Mitsui &amp; Co Ltd (8031 JP)</a>, the largest shareholder with a 32.90% stake, is currently exploring a proposal to privatise <a href="https://www.smartkarma.com/entities/ihh-healthcare-bhd" target="_blank" data-smartkarma-citation="entities:876:1" rel="noopener">IHH Healthcare (IHH MK)</a>. Mitsui is aiming to partner with private equity firms and has reached out to Khazanah Nasional Berhad, the second-largest shareholder with a 26.02% stake, to acquire its stake, according to Bloomberg. Mitsui and IHH have not formally commented on the report. On the back of the report, the shares have risen 8.8% from the unaffected price of RM5.20 (5 May) to the last close price of RM5.66. IHH is listed on the Main Markets of Bursa Malaysia and the Singapore Stock Exchange. In Malaysia, the threshold for triggering a mandatory general offer (MGO) is the offeror and concert parties owning 33% or more of the voting shares. Mitsui sits just below the threshold and the acquisition of further shares from Khazanah Nasional Berhad would trigger an MGO. <div class="content-highlight">We think that report has some credibility due to Mitsui’s view that IHH is a core asset to fulfil its ambition of expanding in the largest healthcare ecosystem in Asia. Also, Mitsui has a previous working relationship with Khazanah Nasional Berhad and announced the acquisition of a 16% stake in IHH from Khazanah Nasional Berhad in November 2018. Overall, at the last close price, the downside risk is low (trading close to break price) with a good probability of upside (announcement of a formal proposal). </div>

On 6 May 2021, Bloomberg reported that Mitsui &amp; Co Ltd (8031 JP), the largest shareholder with a 32.90% stake, is currently exploring a proposal to privatise IHH Healthcare (IHH MK). Mitsui is aiming to partner with private equity firms and has reached out to Khazanah Nasional Berhad, the second-largest shareholder with a 26.02% stake, to acquire its stake, according to Bloomberg. Mitsui and IHH have not formally commented on the report. On the back of the report, the shares have risen 8.8% from the unaffected price of RM5.20 (5 May) to the last close price of RM5.66. IHH is listed on the Main Markets of Bursa Malaysia and the Singapore Stock Exchange. In Malaysia, the threshold for triggering a mandatory general offer (MGO) is the offeror and concert parties owning 33% or more of the voting shares. Mitsui sits just below the threshold and the acquisition of further shares from Khazanah Nasional Berhad would trigger an MGO. We think that report has some credibility due to Mitsui’s view that IHH is a core asset to fulfil its ambition of expanding in the largest healthcare ecosystem in Asia. Also, Mitsui has a previous working relationship with Khazanah Nasional Berhad and announced the acquisition of a 16% stake in IHH from Khazanah Nasional Berhad in November 2018. Overall, at the last close price, the downside risk is low (trading close to break price) with a good probability of upside (announcement of a formal proposal). 

IHH Healthcare’s Possible Privatisation by Mitsui

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Equity Bottom-Up

Metropolis Healthcare Limited / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/metropolis-health-services-limited" target="_blank" data-smartkarma-citation="entities:27829:1" rel="noopener">Metropolis Health Services Limited (METROHL IN)</a> is relatively a younger player in the Indian Diagnostics industry compared to competitors like <a href="https://www.smartkarma.com/entities/dr-lal-pathlabs-ltd" target="_blank" data-smartkarma-citation="entities:26927:1" rel="noopener">Dr Lal PathLabs Ltd (DLPL IN)</a> and <a href="https://www.smartkarma.com/entities/thyrocare-technologies-ltd" target="_blank" data-smartkarma-citation="entities:22694:1" rel="noopener">Thyrocare Technologies (THYROCAR IN)</a>, in terms of pan-India ambitions. However, despite its late entrance, Metropolis has scaled its business quite rapidly through strategic acquisitions and organic growth.
<h3>Insight Flow</h3>
<ul>
<li>Investment Thesis</li>
<li>Risks &amp; Mitigating Factors</li>
<li>Valuation</li>
<li>Conclusion</li>
</ul>

Metropolis Health Services Limited (METROHL IN) is relatively a younger player in the Indian Diagnostics industry compared to competitors like Dr Lal PathLabs Ltd (DLPL IN) and Thyrocare Technologies (THYROCAR IN), in terms of pan-India ambitions. However, despite its late entrance, Metropolis has scaled its business quite rapidly through strategic acquisitions and organic growth.
Insight Flow

Investment Thesis
Risks &amp; Mitigating Factors
Valuation
Conclusion


Metropolis Labs: A New Leader Is in the Making

Thyrocare Technologies / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/thyrocare-technologies-ltd" target="_blank" data-smartkarma-citation="entities:22694:1" rel="noopener">Thyrocare Technologies (THYROCAR IN)</a> has come a long way in the Indian diagnostics industry. In many ways, it has been a pioneer of the space especially in certain niches like the Wellness segment and in leveraging hub and spoke model with the pioneering of test samples logistics through air transportation.
In its around 25 years of existence, it has charted new paths. The first couple of decades saw strong growth. Over the past 5 years, the growth profile has been decelerating. The space has become increasingly competitive and listed players like <a href="https://www.smartkarma.com/entities/dr-lal-pathlabs-ltd" target="_blank" data-smartkarma-citation="entities:26927:1" rel="noopener">Dr Lal PathLabs Ltd (DLPL IN)</a> and <a href="https://www.smartkarma.com/entities/metropolis-health-services-limited" target="_blank" data-smartkarma-citation="entities:27829:1" rel="noopener">Metropolis Health Services Limited (METROHL IN)</a> have been expanding aggressively. Each player has been penetrating into each other's geographies and product niches, limiting differentiation among them.
Thyrocare seems to be adjusting its strategy in response to competition. It has been on an expansion spree in terms of its labs presence and exclusive franchisees. After being fixated on achieving scale with minimal centralized labs, Thyrocare seems to be shifting to a more broader and deeper distribution strategy. It seems to have realized that providing the best quality service may not be achievable with just a handful of centralized labs.
While this shift in strategy seems prudent and bulls would argue that Thyrocare is taking the next leap, the bears would argue that Thyrocare is late to the game and in its desperation to catch up to the competition, it may lose its USP of being the lowest cost producer. Should you be bullish or bearish on Thyrocare? Read on to find out.

Thyrocare Technologies (THYROCAR IN) has come a long way in the Indian diagnostics industry. In many ways, it has been a pioneer of the space especially in certain niches like the Wellness segment and in leveraging hub and spoke model with the pioneering of test samples logistics through air transportation.
In its around 25 years of existence, it has charted new paths. The first couple of decades saw strong growth. Over the past 5 years, the growth profile has been decelerating. The space has become increasingly competitive and listed players like Dr Lal PathLabs Ltd (DLPL IN) and Metropolis Health Services Limited (METROHL IN) have been expanding aggressively. Each player has been penetrating into each other's geographies and product niches, limiting differentiation among them.
Thyrocare seems to be adjusting its strategy in response to competition. It has been on an expansion spree in terms of its labs presence and exclusive franchisees. After being fixated on achieving scale with minimal centralized labs, Thyrocare seems to be shifting to a more broader and deeper distribution strategy. It seems to have realized that providing the best quality service may not be achievable with just a handful of centralized labs.
While this shift in strategy seems prudent and bulls would argue that Thyrocare is taking the next leap, the bears would argue that Thyrocare is late to the game and in its desperation to catch up to the competition, it may lose its USP of being the lowest cost producer. Should you be bullish or bearish on Thyrocare? Read on to find out.

Thyrocare: Taking the Next Leap or Late to the Game?

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Johor Corp, <a href="https://www.smartkarma.com/entities/kpj-healthcare-berhad" target="_blank" data-smartkarma-citation="entities:877:1" rel="noopener">KPJ Healthcare (KPJ MK)</a> 's controlling shareholder, is taking concrete steps to increase the returns on its investment in the company. First, there are a new board of directors and CEO who are placing more emphasis on capital efficiency. Second, Bloomberg reports that Johor Corp is evaluating strategic options, most likely in the form of a minority investment or other transaction that would preserve its controlling stake, as opposed to an outright sale. Either way, the increased focus on returns should drive a re-rating of the shares' EV/EBITDA multiple from 10-12x currently to ~15x.

Johor Corp, KPJ Healthcare (KPJ MK) 's controlling shareholder, is taking concrete steps to increase the returns on its investment in the company. First, there are a new board of directors and CEO who are placing more emphasis on capital efficiency. Second, Bloomberg reports that Johor Corp is evaluating strategic options, most likely in the form of a minority investment or other transaction that would preserve its controlling stake, as opposed to an outright sale. Either way, the increased focus on returns should drive a re-rating of the shares' EV/EBITDA multiple from 10-12x currently to ~15x.

KPJ Healthcare: Re-Energizing the Share Price

India

Fortis Healthcare Ltd. is a health care provider.  The Company operates multi- specialty hospitals, a boutique-style hospital, and various satellite and heart command centers.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Fortis Healthcare (FORH IN)

Forensic Analysis- Narayana Hrudayalaya Ltd

NHL may be a big player in hospital chains, but the review of annual report provides us with several concerns such as poor execution record and...

Nitin Mangal

IHH Healthcare’s Possible Privatisation by Mitsui

Mitsui, the largest shareholder, is currently exploring a proposal to privatise IHH. Overall, at the last close price, the downside risk is low...

Arun George

Metropolis Labs: A New Leader Is in the Making

Metropolis has got its strategy right by focusing on quality and brand. It is also showing healthy growth aggression. With time, we would not be...

Ankit Agrawal, CFA

Thyrocare: Taking the Next Leap or Late to the Game?

Thyrocare seems to be following competition and shifting its strategy towards more decentralization vs its original strategy of heavy...

Ankit Agrawal, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Forensic Analysis- Narayana Hrudayalaya Ltd

NHL may be a big player in hospital chains, but the review of annual report provides us with several concerns such as poor execution record and...

Nitin Mangal

IHH Healthcare’s Possible Privatisation by Mitsui

Mitsui, the largest shareholder, is currently exploring a proposal to privatise IHH. Overall, at the last close price, the downside risk is low...

Arun George

Metropolis Labs: A New Leader Is in the Making

Metropolis has got its strategy right by focusing on quality and brand. It is also showing healthy growth aggression. With time, we would not be...

Ankit Agrawal, CFA

Thyrocare: Taking the Next Leap or Late to the Game?

Thyrocare seems to be following competition and shifting its strategy towards more decentralization vs its original strategy of heavy...

Ankit Agrawal, CFA

KPJ Healthcare: Re-Energizing the Share Price

KPJ Healthcare's controlling shareholder is taking steps to drive a re-rating by placing more emphasis on capital efficiency and evaluating some...

Kemp Dolliver, CFA