Mitra’s 1Q26 revenue came in softer than we expected mainly due to the earlier timing of the Eid holiday and lower BPJS (a universal healthcare program) volume after a tightened patient referral rule, as reflected in the relatively flattish y-y outpatient and inpatient admission trends (Fig. 2 and Fig2), and the decline in BPJS contribution to revenue to the lowest level in five years (Fig. 4). The softer BPJS volume also weighed on overall EBITDA margin. In addition, the company booked a one-off salary bonus during the quarter and recorded higher depreciation expenses following medical equipment upgrades, resulting in a slight y-y net margin contraction. Management expects volume to recover in the coming quarters, supported by early indications (i.e. April traffic growth was +20% higher than March’s).
Outlook: increasingly reliant on private patients
With BPJS-related overhang likely to persist, we believe Mitra’s strategy of focusing more on private patients and higher-complexity cases (24.4% FY25 contribution vs 21% in FY24) through its centres of excellence should better support both revenue growth and margins. Amid rising prices of drugs and consumables this year (e.g., syringes +50%, drugs +4–5%), Mitra is able to pass through the higher costs directly to private patients, who accounted for 90% of revenue in 1Q26. In contrast, passing on higher costs to BPJS patients will remain more challenging following the halt in reimbursement rate increases.
Maintain Buy with a TP of IDR3,120
We revise up our 2026F/2027F EBITDA forecasts by 3% each and EPS by 8%/5%, mainly to reflect the higher mix of private patients following the tightened BPJS referral policy. We lower our TP to IDR3,120 (from IDR3,200), based on 20.5x 2026F EV/EBITDA (previously 21.7x), in line with its five-year average. Given the defensive nature of the hospital business model and Mitra’s high exposure to private patients, we expect the company to deliver relatively resilient earnings against a challenging macro backdrop. We also believe rising input costs should have limited impact on EBITDA margin, as Mitra is able to pass through higher costs to consumers. Key downside risks include a sudden sharp decline in BPJS patient volume, which could weaken the company’s scale advantage. Currently, Mitra trades at 9.8x 2026F EV/EBITDA.
Company profileMIKA IJ was established in 1989, Targeting mainly Indonesia’s most attractive markets in the greater Jakarta and Surabaya areas and selected other cities. Mitra Keluarga’s network comprises of 17 Mitra Keluarga and 9 Kasih Group hospitals.
Valuation MethodologyOur TP of IDR3,120 is derived from 20.5x 2026F EV/EBITDA (equivalent to its five-year average). The benchmark index is the JCI.
Risks that may impede the achievement of the target priceThe key downside risk lies in the company’s ability to successfully expand beyond tier-1 cities, which may present operational and demand-side challenges.
ESGMIKA Hospital is committed to always implementing ESG. Company's focus areas are: 1) implement digitization into operations to boost human resource development and reduce ~400% forms 2) responsible and environmentally friendly waste management, as well as efficient use of resources 3) turning plastic medicine packaging into biodegradable 4) social assistance and community development programs that focus on public health and education.
Fig. 1: Mitra— Earnings changes
Source: Company data, Verdhana estimates
Fig. 2: Inpatient admissions
Source: Company data, Verdhana research
Fig. 3: Outpatient visits
Source: Company data, Verdhana research
Fig. 4: BPJS revenue contribution (%)
Source: Company data, Verdhana research
INVESTMENT RATINGS A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general.
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