Hold Narayana Hrudayalaya, target price Rs 1,460: Choice Equity Broking

Choice Equity Broking has a Hold call on Narayana Hrudayalaya with a target price of Rs 1,460. The current market price of Narayana Hrudayalaya is Rs 1,407.6. Narayana Hrudayalaya, incorporated in 2000, is a Mid Cap company with a market cap of Rs 28474.61 crore, operating in the Hospitals & Allied Services sector.

Narayana Hrudayalaya's key products/revenue segments include Income from Medical and Healthcare Services, Medical Equipment and Other Operating Revenue for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 1385.04 crore, down -2.71 % from last quarter Total Income of Rs 1423.61 crore and up 13.39 % from last year same quarter Total Income of Rs 1221.52 crore. The company has reported net profit after tax of Rs 193.05 crore in the latest quarter.

The company's top management includes Dr.Devi Prasad Shetty, Dr.Nachiket Mor, Mr.Shankar Arunachalam, Ms.Terri Smith Bresenham, Ms.Nivruti Rai, Dr.Anesh Shetty, Dr.Kiran Mazumdar Shaw, Dr.Emmanuel Rupert, Mr.Viren Prasad Shetty, Mr.Naveen Tewari. Company has Deloitte Haskins & Sells LLP as its auditors. As on 31-12-2024, the company has a total of 20 Crore shares outstanding.

Investment Rationale
Choice Equity Broking values Narayana Hrudayalaya at an EV/EBITDA of 18x on an FY27 basis, with a target price of Rs 1,460 and have downgraded ourrating to 'HOLD'. With no bed expansion in the India region (which accounts for 80% of revenue) until FY28, the brokerage expects a slowdown in revenue growth. However, the ramp-up of the new Cayman Bay facility is expected to reduce high operational costs related to scaling the facility, thereby improving NARH's overall EBITDA margin.

Promoter/FII Holdings
Promoters held 63.85 per cent stake in the company as of 31-Dec-2024, while FIIs owned 9.45 per cent, DIIs 8.68 per cent.