Yatharth Hospit. (YATHARTH)

FairStock Score: 34/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Sales growth of 46.23% and profit growth of 48.74% show rapid, profitable expansion.
• Near-zero debt (D/E 0.02) gives strong financial flexibility for hospital expansion.
• Promoter holding at 55.80% aligns long-term interests with minority shareholders.
• Piotroski F-Score of 7/9 indicates solid fundamentals and earnings quality.
• Latest quarter net profit of ₹43 Cr on sales of ₹320 Cr reflects healthy operating scale.

Concerns

• P/E of 40.85 and P/B of 8.35 leave little margin of safety; valuation already assumes high growth.
• ROE of 10.67% is modest, especially against a P/B of 8.35, implying future returns must improve sharply.
• Zero dividend yield means investors depend entirely on capital appreciation.
• FairStock Score of 39/100 suggests mixed fundamentals despite strong growth.

AI Analysis

Yatharth Hospit is not a Benjamin Graham net-net or asset play; it is a fast-growing hospital business selling at a premium. The latest quarter sales of ₹320 Cr and net profit of ₹43 Cr show real momentum, and the trailing growth rates—sales up 46.23%, profit up 48.74%—are impressive. A P/E of 40.85 and P/B of 8.35 mean the market is paying up for that growth. The PEG of 0.86 is the only valuation comfort: if the 48% profit growth persists, the multiple becomes less scary. But I am skeptical of extrapolating high growth indefinitely. Hospitals have local moats, but they also face regulatory and competitive pressures; the figures alone don't tell me how deep Yatharth's moat is. Financially, the company is conservative: debt-to-equity of 0.02 and a Piotroski score of 7/9 indicate a healthy balance sheet and sound operating discipline. However, ROE of 10.67% is below what I expect from a business with a P/B over 8. With book value ₹90.58, the price-to-book suggests investors are underwriting substantial future returns. The zero dividend yield reinforces that all returns must come from capital appreciation. Promoter holding of 55.80% is positive—their money is in the game. FairStock Score of 39/100 echoes my mixed feeling: a wonderful growth trajectory, but not a bargain. If the company can translate its expansion into higher ROE and keep profit growth in the 40s, the current price may prove fair; if growth slips, the high P/E leaves little margin of safety. I would wait for a better price or evidence of durable profitability before committing new capital.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer