Buy Narayana Hrudayalaya; target of Rs 750: ICICI Direct

ICICI Direct's research report on Narayana Hrudayalaya

NHL operates a chain of multispecialty, tertiary & primary healthcare facilities that initially focused on cardiac & renal but expanded to cancer, neurology, neurosurgery, orthopaedics & gastroenterology facilities. NHL’s network comprises 21 hospitals (including two managed hospitals), four heart centres, 18 primary care facilities (including clinics and information centres) and a multi-speciality hospital in Cayman Islands) • Revenue mix FY22 – India: Rs 2965.5 crore; (Bangalore:31%, Southern Peripheral:7%, Kolkata:27%, Eastern Peripheral: 5%, Western: 16%, Northern: 13%); Cayman Islands: US$91.9 million.

Outlook

We value Narayana at an SOTP of Rs 750 by valuing matured India & Cayman hospitals at 14x FY24E EV/EBITDA, new hospitals at 2x and other business at 1x FY23E EV/sales.

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