Anand Rathi's research report on Narayana Hrudayalaya
Lagging the consensus and ARe, Narayana Hrudayalaya reported flat y/y Q2 EBITDA at Rs3.1bn on incremental cost incurred for the new Cayman unit. Highlights: a) Cayman business reported revenue/EBITDA of Rs2.4bn/Rs950m, down 7%/23% y/y. b) India business saw healthy EBITDA, up 15% y/y (adjusted for NHIC losses); c) India occupancy was 65% in Q2. Management reiterated its capex plan for the next three-four years; further, it would focus on de-bottlenecking and a better bed mix. In the medium term, the company intends to add ~1,500 beds through greenfield expansions across Bengaluru, Kolkata and Raipur.
Outlook
We introduce and roll forward to FY27e and ascribe 12x EV/EBITDA multiple to Cayman business and 21x EV/EBITDA to the domestic business to arrive at a revised TP of Rs1,550 (Rs1,380 earlier).We upgrade to aBuy on rollover to FY27e.
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