Narayana Hrudayalaya- Preparing for next capex cycle📈
A hospital chain reported good #Q1FY25 results + Good growth prospects in both Indian & Cayman business
(#NarayanaHrudalaya)
A thread🧵
A hospital chain reported good #Q1FY25 results + Good growth prospects in both Indian & Cayman business
(#NarayanaHrudalaya)
A thread🧵
📌About:
🔸Narayana Hrudayalaya operates a chain of multispecialty, tertiary & primary healthcare facilities that focuses on Cardiac, Renal, Cancer, Neurology, Neurosurgery, Orthopaedics and Gastroenterology specialties
Revenue mix📊
🔸India: ₹ 1085.5 crore; (Bengaluru: 34%, Southern Peripheral: 9%, Kolkata: 25%, Eastern Peripheral: 10%, Western: 5%, Northern: 17%); Cayman Islands: US$32 million
2/n
🔸Narayana Hrudayalaya operates a chain of multispecialty, tertiary & primary healthcare facilities that focuses on Cardiac, Renal, Cancer, Neurology, Neurosurgery, Orthopaedics and Gastroenterology specialties
Revenue mix📊
🔸India: ₹ 1085.5 crore; (Bengaluru: 34%, Southern Peripheral: 9%, Kolkata: 25%, Eastern Peripheral: 10%, Western: 5%, Northern: 17%); Cayman Islands: US$32 million
2/n
📌India Business👇
🔸Revenues improved ~8% YoY to ₹ 1341 crore, driven by ~10% growth in India to ₹ 1086 crore
🔸EBITDA grew ~8% to ₹ 304 crore and margins stood at ~23%
🔸ARPOB for Indian hospitals during the quarter came in at ₹ 41370, a growth of 11% YoY
🔸India In-patient (IP) average revenue per patient grew 6% YoY to ₹ 130000. Similarly, IP footfall grew 6% to 650000 during the quarter
3/n
🔸Revenues improved ~8% YoY to ₹ 1341 crore, driven by ~10% growth in India to ₹ 1086 crore
🔸EBITDA grew ~8% to ₹ 304 crore and margins stood at ~23%
🔸ARPOB for Indian hospitals during the quarter came in at ₹ 41370, a growth of 11% YoY
🔸India In-patient (IP) average revenue per patient grew 6% YoY to ₹ 130000. Similarly, IP footfall grew 6% to 650000 during the quarter
3/n
📌Cayman Business👇
🔸Cayman growth was subdued at ~5% to ₹ 267 crore
🔸Cayman Islands hospital average revenue per patient grew 3% to US$ 31900 during the quarter
🔸During the quarter leading Specialty profile was as follows- Cardiac Sciences- 33%, Oncology- 16%, Medicine and GI Sciences- 13%, Renal Sciences- 10%, Neuro Sciences- 8%
🔸Payor profile during the quarter was as follows Domestic Walk-in patients- 42%, Insured Patients- 29%, Schemes (Government) Patients- 21%, International Patients- 8%
4/n
🔸Cayman growth was subdued at ~5% to ₹ 267 crore
🔸Cayman Islands hospital average revenue per patient grew 3% to US$ 31900 during the quarter
🔸During the quarter leading Specialty profile was as follows- Cardiac Sciences- 33%, Oncology- 16%, Medicine and GI Sciences- 13%, Renal Sciences- 10%, Neuro Sciences- 8%
🔸Payor profile during the quarter was as follows Domestic Walk-in patients- 42%, Insured Patients- 29%, Schemes (Government) Patients- 21%, International Patients- 8%
4/n
📌Capex plans
(i) Insurance: The company is targeting aggressive capex (+₹ 3000 crore in the next 2-3 years) in cities such as Bengaluru and Kolkata where it has strong presence and brand loyalty
(ii) Cayman:
🔸Likely to commence operations in H2FY25
🔸While the capex phase would be by far the largest in the last ten years, we believe the company is far better poised (despite negative FCF in FY25-26) to fathom the impact on the balance sheet as the margins and the return ratios are in good shape
5/n
(i) Insurance: The company is targeting aggressive capex (+₹ 3000 crore in the next 2-3 years) in cities such as Bengaluru and Kolkata where it has strong presence and brand loyalty
(ii) Cayman:
🔸Likely to commence operations in H2FY25
🔸While the capex phase would be by far the largest in the last ten years, we believe the company is far better poised (despite negative FCF in FY25-26) to fathom the impact on the balance sheet as the margins and the return ratios are in good shape
5/n
📌Management guidance
🔸Focus is on sustaining & expanding margins. This will be driven by a favorable Specialty and Payor mix💰
🔸Concall highlights👇
6/n
🔸Focus is on sustaining & expanding margins. This will be driven by a favorable Specialty and Payor mix💰
🔸Concall highlights👇
6/n
Our Rating and Target price🎯
🔸Our SOTP valuation of ₹ 1485 is based on 24xFY26E Indian hospitals EBITDA and 15x FY26E Cayman hospital EBITDA
🚩Key risks
(i) Delay in Capex plan
(ii) Slower than expected ramp-up at new Cayman hospital
7/n
🔸Our SOTP valuation of ₹ 1485 is based on 24xFY26E Indian hospitals EBITDA and 15x FY26E Cayman hospital EBITDA
🚩Key risks
(i) Delay in Capex plan
(ii) Slower than expected ramp-up at new Cayman hospital
7/n
Let us know in comments which Company’s #Q1FY25 you want us to cover next!👇
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