February 14, 2017 / 13:55 IST
We believe NH is entering a strong growth phase, as capacity utilization ramps up and new beds get added. We expect occupancy to improve further over the next 3 years. As bulk of the capex is over, we expect 20% revenue CAGR coupled with 450 bps improvement in EBITDA margin to 16% (as utilization improves) over FY16-20.
Outlook
While immediate upside is capped, we believe, the stock can compound at 15% given earnings are back-ended and 3x increase in EBITDA to Rs 5 bn expected by FY20. Maintain HOLD with DCF based TP of Rs 341(implies 24x FY18E EV/EBITDA).
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