Narayana Hrudayalaya - India Business To Drive Growth: Prabhudas Lilladher

Prabhudas Lilladher Report

We hosted the management of Narayana Hrudayalaya Ltd. for NDR at Mumbai. The management reiterated its aggressive capex plan and commitment towards growing throughput over the next three-four years through debottlenecking, refurbishment and better bed mix.

In the medium term, the company intends to add 1,500 beds through greenfield expansion across Bengaluru, Kolkata and Raipur, benefits of which will be seen from FY28/29.

More importantly, capex spend would be mainly towards core and high-performing regions such as Bengaluru, Kolkata and Cayman, to enhance growth visibility. We expect 14% Ebitda CAGR over FY24-27E. Return on equity/return on capital employed will remain healthy at ~24/21%, despite capex intensity going up.

At current market price, the stock is trading at valuations of 18.4 times enterprise value/Ebitda (PRE IND AS) and 27.4 times P/E on FY26E.

Our FY25/FY26E Ebitda estimate stands reduced by 5%/4% as we factor in higher losses from the new unit at Cayman. Maintain ‘Buy’ rating with a revised target price of Rs 1,420/share (earlier Rs 1,350/share) as we roll forward, based on 23 times Sep’26E EV/Ebitda for India business and 12 times EV/Ebitda for Cayman. Faster ramp-up in the Cayman unit will be the key.

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