At a Glance
Narayana Hrudayalaya (NH), the “affordable heart hospital” that figured out how to do world-class surgeries at McDonald’s pricing, just reported Q1 FY26 revenue of ₹1,507 crore, up 15.4% YoY, and a PAT of ₹197 crore (flat YoY, down 2.3% QoQ). The market cheered a little, pushing the stock to ₹1,946 (+1.58%), but at a P/E of 50, even the doctors here would recommend a sedative before buying. EBITDA rose to ₹360.7 crore, margins are holding at 22%, and the company announced a ₹2,500 crore debt securities plan – because why not add some drama to the heartbeat?
Introduction
Narayana Hrudayalaya (NH) is the poster child of “affordable healthcare meets investor darling.” Founded by Dr. Devi Shetty, the hospital chain built its empire on high-volume, low-cost treatments – think heart surgeries cheaper than an iPhone. Over the years, the brand expanded to 40 facilities with 5,789 operational beds, including a posh Cayman Islands hospital catering to medical tourists who think “affordable” means paying in dollars.
While patients love the model, investors have mixed feelings. The stock has skyrocketed 55% YoY, but with a P/E north of 50, one wonders if they’re paying for the surgeries or the hospital itself.
Business Model (WTF Do They Even Do?)
NH operates on a high-volume, low-cost model: treat more patients at lower margins, and profits still add up. The company focuses on cardiac care but has expanded to oncology, neurology, orthopedics, and general surgery.
- India: 19 hospitals, 2 heart centers, 18 clinics, dialysis centers.
- International: Cayman Islands hospital – their cash cow in a paradise tax haven.
This model is revolutionary in India but comes with scaling challenges. Expansion = high capex = debt. Also, healthcare is a people business; one bad regulatory move or a doctor exodus, and margins flatline.
Financials Overview
Q1 FY26 Results
- Revenue: ₹1,507 crore (+15.4% YoY)
- EBITDA: ₹360.7 crore (EBITDA Margin 24%)
- PAT: ₹197 crore (-2.3% QoQ)
- EPS: ₹9.62
FY25 Full Year
- Revenue: ₹5,483 crore
- PAT: ₹791 crore
- Margins: OPM 23%, PAT Margin 14%
Commentary: Revenue is growing, margins steady, but profit stagnated this quarter. Blame rising costs and a slight dip in Cayman profitability.
Valuation
Let’s dissect like a cardiac surgeon:
- P/E Method
- TTM EPS: ₹38.4
- Sector P/E (Hospitals): 60+ (Apollo, Fortis are higher)
- Fair Value: ₹1,600–₹2,100
- EV/EBITDA Method
- EV/EBITDA multiple: 20x
- EBITDA (TTM): ₹1,310 crore
- EV ≈ ₹26,200 crore → per share value ≈ ₹1,700–₹1,900
- DCF (Quick & Dirty)
- Assume 10% growth, 10% discount
- Fair Value ≈ ₹1,800–₹2,200
Final Range: ₹1,700–₹2,200 (current ₹1,946 = fairly priced, flirting with expensive).
What’s Cooking – News, Triggers, Drama
- ₹2,500 Cr NCD Issue: Proposed debt securities issuance for expansion & refinancing.
- International Expansion: Focus on Cayman Islands & potential Africa push.
- Capacity Utilization: New beds to drive growth, but staffing costs rising.
- Regulatory Risk: Healthcare pricing caps by the government could pinch margins.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 7,265 |
| Liabilities | 3,638 |
| Net Worth | 3,626 |
| Borrowings | 2,428 |
Remarks: Auditor’s note – “Debt is manageable, but with new borrowings coming, the heart rate may spike.”
Cash Flow – Sab Number Game Hai
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Operating | 1,085 | 1,067 | 986 |
| Investing | -1,176 | -1,458 | -1,325 |
| Financing | 88 | 488 | 544 |
Remarks: Operating cash flow is healthy, but capex burns cash faster than a patient’s ECG spike during a heart attack.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 24.5% |
| ROCE | 20.6% |
| P/E | 50.3 |
| PAT Margin | 14% |
| D/E | 0.67 |
Remarks: Profitability ratios are hot, but the P/E is giving investors palpitations.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 4,525 | 5,018 | 5,483 |
| EBITDA | 987 | 1,173 | 1,276 |
| PAT | 607 | 790 | 791 |
Remarks: Revenue rising steadily, but PAT flatlined in FY25—growth is slowing.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Apollo Hospitals | 21,794 | 1,446 | 73.1 |
| Max Healthcare | 7,028 | 1,132 | 107.2 |
| Fortis | 7,783 | 840 | 77.2 |
| Narayana Health | 5,717 | 786 | 50.3 |
Remarks: NH trades at a discount to peers but still pricey. Investors are paying up for quality.
Miscellaneous – Shareholding, Promoters
- Promoters: 63.85% (stable)
- FIIs: 10.46% (buying slowly)
- DIIs: 8.09% (trimming exposure)
- Public: 16.98% (retail riding the rally)
Promoters’ strong holding = confidence, but FIIs haven’t gone gaga yet.
EduInvesting Verdict™
Narayana Hrudayalaya is the doctor of your portfolio – steady, dependable, but not cheap. Growth remains intact, Cayman is the golden goose, and margins are strong. However, at a P/E of 50, any slip-up could lead to an investor heart attack.
SWOT Analysis
- Strengths: Strong brand, high ROE, efficient cost structure, global expansion.
- Weaknesses: High valuation, profit growth stagnation.
- Opportunities: Medical tourism, new hospital capacity, asset-light partnerships.
- Threats: Pricing regulations, rising costs, debt burden.
Final Word: NH remains a high-quality healthcare play. Great business, but at this price, it’s like paying Apollo rates for a government hospital bed – only for those with a strong heart.
Written by EduInvesting Team | August 02, 2025
SEO Tags: Narayana Hrudayalaya, NH Q1 FY26 Results, Hospital Stocks India, Healthcare Sector Analysis
