Narayana Hrudayalaya Q2 Results Review - Strong Show; Earnings Upgrade Continues: Prabhudas Lilladher

Prabhudas Lilladher Report

Narayana Hrudayalaya Ltd. reported healthy Ebitda at Rs 3.1 billion (up 26% YoY), 11% beat to our estimate. Both India (Rs 1.9 billion; up 28% YoY) and Cayman ($14.6 million; up 20% YoY) reported healthy profitability.

We expect this growth momentum to sustain. Narayana Hrudayalaya reiterates its aggressive capex plan mainly towards its core and high performing regions such as Bangalore, Kolkata and Cayman which enhances growth visibility.

Despite capex intensity going up, return on equity/return on capital employed will remain healthy at ~25%. Our FY24E and FY25E Ebitda stands increased by 7% and 4%.; respectively.

We maintain ‘Buy’ rating with a revised target price of Rs 1,250/share (earlier at 1,110/share), based on 22 times September-2025E enterprise /Ebitda for India business and 12 times EV/Ebitda for Cayman hospitals.

At current marker price, stock is trading at attractive valuations of 18 times EV/Ebitda (adjusted for IND Accounting Standard). Faster ramp up in new Cayman unit (operationalize from H1 FY25) will be a key.

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