Jhunjhunwalas' 2nd largest stock holding gets 11% upside target

Inventurus Knowledge Solutions Ltd, where the Jhunjhunwala family members are promoters and account for over 49 per cent stake, has received 'ADD' rating from ICICI Securities, with a target of Rs 1,820. 

The Inventurus Knowledge Solutions stake, held by Rekha Rakesh Jhunjhunwala, trusts belonging to late Rakesh Jhunjhunwala's three children - Aryaman, Aryavir and Nishth, and RARE Enterprises, was worth Rs 13,726 crore as of Friday's trade.

The technology-enabled healthcare solutions provider recently announced a $17 million investment via its US subsidiary to acquire a 48.02 per cent stake in IKS WWMG MSO LLC, a newly formed Management Services Organization (MSO) in the US. 

ICICI Secuirties said: "We reckon a resemblance with the Palomar-like deal blueprint (announced in Q3FY25, wherein IKS paid $16.5 million). This JV investment reflects IKS’ maturing capital strategy—moving from balance-sheet leveraged deals to structured, transparent, and accountable JVs. It will likely forge client stickiness for IKS."

Success shall hinge on disciplined execution, integration with core offerings, and realisation of strategic and financial synergies, it said while valuing the IKS stock based on 35 times target P/E. 

On Friday, the stock was trading 1.3 per cent lower at Rs 1,622.75. The target suggests double-digit returns going ahead.

ICICI Securities said the US healthcare industry is facing headwinds. This is a tough time for the industry given reimbursements adjusted for inflation are declining with revenue having grown by 10 per cent and costs up 15 per cent. 

It said operating costs synergies have not played out upon aggregation in the manner envisaged, adding that IKS positioning its comprehensive platform with value propositions across dimensions such as reducing overall cost of operations; enabling better quality of care; facilitating expanded capacity and access; and reducing cost of care.

"This engagement is similar to the full platform-based Palomar deal, wherein IKS is able to offer synergies from a full platform implementation and lock in the client for longer timeline, thus creating revenue predictability. This MSO can include other clients in its fold, or a similar construct can be implemented for other physician groups," ICICI Securities said.