Buy Narayana Hrudayalaya, fair value Rs 380: Kotak Institutional Equities

Kotak Institutional Equities has retained buy rating on Narayana Hrudayalaya in the long term and revised fair value to Rs 380 from Rs 410. Shares of Narayana Hrudayalaya ended down 7% at Rs 247.55 on Friday while the BSE Sensex closed 1627.73 points up (+5.75%) at 29,915.96.

Investment Rationale

The brokerage expects Narayana’s near-term earnings to face challenges on account of Covid-19 given lower volume of international and domestic travel patients, temporary closure of Cayman facility as well as deferment in OPD footfalls and elective surgeries. The brokerage said the impact will be transitory and expect a full demand recovery in the second half of FY21.


Financials

Narayana Hrudayalaya's key products/revenue segments include income from Medical and Healthcare Services which contributed Rs 1985.97 crore to sales value (95.61 per cent of total sales); Medical Equipment which contributed Rs 79.19 crore to sales value (3.81 per cent of total sales) and Other Operating Revenue which contributed Rs 12.00 crore to sales value (0.57 per cent of total sales)for the year ending March 31, 2019.
For the quarter ended December 31, 2019, the company reported consolidated sales of Rs 785.19 crore, down -4.51 per cent from last quarter sales of Rs 822.30 crore and up 7.25 per cent from last year same quarter sales of Rs 732.10 crore. The company reported net profit after tax of Rs 32.41 crore in the latest quarter.