My Small Cap Pick: Kovai Medicals.

yoogi · #1 26th October 2007, 06:09 PM

Anyone from Kongu region of Tamil Nadu would be familiar with this hospital.

This is an outdated page, http://www.kmchonline.com/about_kmch.html

The road you see is a road within its premises.

1. Situated on the outskirts of Coimbatore, this hospital spans over an area of around 20 acres (my rough estimate. It cant be less, may be more) at a place where an acre can easily cost 2 - 4crores. Land valuation will be roughly 40 - 80 crores.

2. Hospital has two satellite medical centers at Ramnagar,Coimbatore and Perundurai. One seperate Hospital at Erode.

http://www.kmchonline.com/satellite_centres.html

3. Present capacity is about 750 beds and shortly expanding by another 250. ( last week Hindu opportunities advt..)

Rental of exclusive rooms costs 575 - 3300 a day and other beds range from 100- 275. As usual the rooms are brimming with patients and the rental alone can earn them around 4 - 8 crores in revenue.

At current market cap of 67 crores, and a PE of 10, it is very cheap.
I expect it to touch 120 cr market cap in a year with minimal downside risk and a buy at current level.

Disclosure: I am having a minimal exposure as I usually avoid heavy positions in small cap stocks. Advice the same.

yoogi · #2 27th December 2007, 11:55 AM

Now, according to one of their recruitment Ad last week,

They have 4 hospitals around major towns in Coimbatore.
They have a capacity of 1300 beds and plans to expand more... (almost 90% expansion from previous adv 3-4 months ago..)
They do buy-out small hospitals in that region. (last year or an year before they bought a hospital in Erode..)

The stock has made a break out above its life high of 73 very recently.

Target: 120.
SL : 64 rs.

Current market cap : 87 crore. Thats 22% appriciation from my recent recommendation.