Prabhudas Lilladher's research report on Narayana Hrudayalaya
Narayana Hrudayalaya (NARH) reported healthy EBIDTA at Rs2.71bn (up 41% YoY, 8% beat to our estimate. Both India (Rs1.65bn; flat QoQ) and Cayman ($13.5mn; up 7% QoQ) reported healthy profitability. We expect this growth momentum to sustain. The company 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, RoE/ RoCE will remain healthy at ~25%. Our FY24E and FY25E EBIDTA marginally stands increased by 2%.
Outlook
We maintain ‘BUY’ rating with a revised TP of Rs. 1,110/share, based on 22x FY25E EV/EBITDA for India business and 12x EV/EBITDA for Cayman hospitals. At CMP, stock is trading at valuations of 17.6x EV/EBITDA (adj for IND AS) and 26x P/E on FY25E.
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