📌 At a Glance
Narayana Hrudayalaya runs 40 hospitals across India and the Cayman Islands — and it turns out, saving lives is a great business model. With a 44% stock CAGR over 3 years, 24.5% ROE, and a steady ₹790+ Cr PAT run-rate, NH has quietly become the most capital-efficient hospital chain in the country. But at 49x earnings, is it still investible… or in need of financial bypass?
1️⃣ Business Model – Cardio Capitalism Done Right
NH is a super-specialty hospital chain focused heavily on cardiac, oncology, neurology, and transplant surgeries. Think: lower cost than Apollo, but higher operational discipline.
Operations:
- India: 19 hospitals, 2 heart centers, 18 clinics/dialysis
- Cayman Islands: 1 big dollar-minting hospital
- Beds: 5,789 operational beds across 40 healthcare facilities
- Occupancy: ~65–70% average
- ARPOB: Continues to rise steadily YoY
The Cayman unit (yes, that one) generates 50%+ EBITDA margins — it’s NH’s cash cow in beachwear.
2️⃣ Financials – Clean, Scalable, Profitable
| Metric | FY25 | YoY Change |
|---|---|---|
| Revenue | ₹5,483 Cr | +9% |
| Net Profit | ₹791 Cr | Flat |
| EBITDA Margin | 23% | Steady |
| ROE | 24.5% | Excellent |
| EPS | ₹38.66 | ↔ |
| Dividend Payout | 12% | Token |
💡 5-Year Profit CAGR: 44%
💡 5-Year Stock CAGR: 48%
Margins are high, cash flows are clean, and capex is self-funded. A hospital that acts like an FMCG stock? Yep.
3️⃣ Valuation – Rich, But Justified?
- P/E: 49
- P/B: 10.7
- Market Cap: ₹39,000 Cr
- EV/EBITDA: ~28x (based on run-rate)
🧠 Fair Value Range (EduEstimate): ₹1,400–1,600
Assuming steady ₹850–₹900 Cr PAT and 30–35x PE band. Anything above ₹1,900 needs growth to re-accelerate.
Right now you’re paying for the next phase of expansion — and it better be surgical.
4️⃣ Balance Sheet – Leverage Rising, But Still Clean
- Debt: ₹2,428 Cr (Up from ₹884 Cr in FY23)
- Net Cash Flow: ₹205 Cr in FY25
- Cash from Ops: ₹986 Cr
- Capex (FY24–25): Mostly for Cayman, oncology units, and bed expansion
The company’s assets have doubled in 2 years, with CWIP down from ₹514 Cr to ₹70 Cr → meaning new infra is now live and earning.
5️⃣ Strengths – No ICU Needed
- 🏥 Best-in-class ROE: 24% vs Fortis at 12%, Apollo at 17%
- 🌎 Cayman Model: Offshore revenue hedge + 50%+ EBITDA
- 🔁 Repeatability: Most revenue from critical care, surgery, dialysis — not OPD fluff
- 🧪 Clinical Reputation: Strong patient loyalty = higher ARPOB and occupancy
- 📈 Strong Earnings History: Consistent growth since 2018 (post IPO ramp-up)
6️⃣ Risks – Heart Rate Monitoring Required
- 📉 Sales growth slowing: 9% YoY vs 12–14% earlier
- 🧾 Valuation fatigue: At 49x P/E, even one soft quarter could cause derating
- 🏗️ Leverage building: Debt more than doubled in 2 years
- 💰 Working Capital Days: From 15 to 66 → collections and receivables stretching
- 🌴 Cayman dependency: A hurricane, regulatory shift, or medical tourism crackdown and margins collapse
7️⃣ Final Thoughts – A Healthcare Stock That Doesn’t Need a Check-Up
Narayana Hrudayalaya is capital efficient, well-managed, globally diversified, and compounding profits like clockwork.
But… markets have caught on. The price now reflects perfection — or at least, high expectations.
If you already own it, congratulations, your doctor made you rich.
If you’re entering now, do it with a surgical strike, not a full portfolio transplant.
✍️ Written by Prashant | 📅 20 June 2025
✅ Tags
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