Jupiter Life Line shares rally after strong listing; should you hold or book profits?

Shares of Jupiter Life Line Hospitals saw a strong buying interest from the investors on its maiden trading session after listing. The company delivered a strong listing pop to investors and others lapped-up to buy shares of the company post listing, as the session progressed.

On Monday, shares of Jupiter Life Line Hospitals were listed at a premium of 32 per cent at Rs 973 apiece on the National Stock Exchange (NSE), compared to the issue price of Rs 735. Similarly, the hospital chain made its debut at a premium of 31 per cent at Rs 960 on BSE.

However, the stock rose another 15 per cent after listing to Rs 1,107.50 on BSE, extending the overall gains to more than 50 per cent over the given issue price of Rs 735. However, the strong momentum in the stock during a weak and range-bound trading session has left investors baffled if they should hold the stock or exit the counter or if new entry shall be made in the stock.

"We initiate coverage on Jupiter Life Line Hospitals with a 'buy' for a price target of Rs 1,185 per share, representing an upside of 18.5 per cent over the next 24 months," said Ventura Securities. "Over the period FY23-26E, we expect Jupiter Life Line's revenue to grow at a CAGR of 13.5 per cent to Rs 1,304 crore by FY26."

In the bull Case, Ventura has assumed revenue of Rs 1,400 crore and an EBITDA margin of 23 per cent at a P/E of 42 times, which will result in a price target of Rs 1,338, while in bear case, it has assumed revenue of Rs 1,200 crore  and an EBITDA margin of 18 per cent at a P/E of 38 times, which results in a price target of Rs 831, the report said.

Jupiter Life Line Hospital' initial public offering (IPO) was open for bidding between September 6 to September 8.  Its issue was sold in the range of Rs 695-735 apiece with a lot size of 20 shares. The company raised a little over Rs 869-crore from its primary stake sale, including a fresh share sale of Rs 542 crore and offer-for-sale (OFS) of Rs 327 crore.

Jupiter has a fantastic payers mix with very low dependency on government schemes for revenue, robust financials, cost efficiency, with deep rooted operations in the densely populated cities and ‘all-hub-no-spoke’ model helps the company to stand out of other giants in the industry, said Mahesh M Ojha, AVP - Research at Hensex Securities with a suggestion of booking 100 per cent profits.

Considering demand in the healthcare sector and expansion plan followed by fancy demand for branded chain of hospitals, justifies the healthy premium listing, said Prashanth Tapse, Senior VP (Research), Mehta Equities. "We advise allotted short-term investors to look for booking profits while a risk taker can look to buy and hold considering long term," he said.

The issue was overall subscribed 64.80 times. The portion for qualified institutional bidders (QIBs) was booked 181.89 times, while the non-institutional investors' allocation was subscribed 36 times. The quota reserved for retail investors was subscribed only eight times during the bidding process.

Jupiter Life Line Hospitals made its debut on the stock markets and it is a well-established multi-specialty healthcare provider in the western region of India, and it is planning to expand its operations in the future, said Anubhuti Mishra, Equity Research Analyst at Swastika Investmart.

"The IPO was well-received by investors, with the issue being subscribed 64.8 times which led to such a good listing gain. Investors who participated in the IPO can now book profit while those who want to hold it long term may maintain a stop loss stop loss at around Rs 875," she advised.

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