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ICICI Securities upgrades Nephrocare Health Services to buy, lifts target
The brokerage raised its price target to ₹825 from ₹725 and projects strong growth through FY26 to FY29, including a jump in EBITDA margin to 26.5% in FY29E.
ICICI Securities has upgraded Nephrocare Health Services to a buy rating from an add and increased its target price to ₹825 from ₹725, according to LiveMint Markets. The stock has been rallying despite softer broader sentiment, up 64% year-to-date versus the Sensex’s 12% decline.
LiveMint Markets reports Nephrocare shares have gained nearly 10% in September and are above recent trading levels, after hitting a 52-week high of ₹767.95 on 12 June and a 52-week low of ₹445 on 19 December. In its 8 September note, ICICI Securities valued the company at 33 times FY28E earnings, up from 30 times earlier.
ICICI Securities expects revenue, EBITDA, and PAT CAGRs of about 21.7%, 27.6%, and 43.4%, respectively, over FY26 to FY29E, with operating leverage driving a 356 basis point increase in EBITDA margin to 26.5% in FY29E, LiveMint Markets said. The brokerage also pointed to scaling returns, projecting ROE rising from 12.7% in FY26 to 18.8% in FY29E and RoCE from roughly 12.4% to 18.1% over the same period.
On strategy, LiveMint Markets says ICICI Securities highlighted Nephrocare’s asset light model and overseas expansion, citing acquisitions of 29 companies in the Philippines over FY23 to FY26 and the higher realization rates outside India. The company has opened a new center in Saudi Arabia and is on the verge of entering Kazakhstan after acquiring a 100% stake in Dialysis Center Almaty, according to the report.
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