Narayana Hrudayalaya Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Revenues grew 25.2% YoY to | 652.3 crore (I-direct estimate: | 609.4 crore) mainly due to consolidation of Health City Cayman Islands Ltd (Cayman) and incremental revenues from new hospitals EBITDA margins declined 240 bps YoY to 7.3% (I-direct estimate: 8.3%) mainly due to higher employee expenses. EBITDA de-grew 5.9% YoY to | 47.4 crore (I-direct estimate: | 50.4 crore) Net loss was at | 4.1 crore (I-direct estimate of net profit: | 5.8 crore)...

ICICI Securities Ltd | Retail Equity Research Revenues grew 34% YoY to | 647 crore (I-direct estimate: | 595 crore) mainly due to consolidation of Health City Cayman Islands (Cayman) and incremental revenues from new hospitals EBITDA margins declined 398 bps YoY to 8.1% (I-direct estimate: 12.0%) mainly due to an increase in doctor payouts, expenses related to new facilities, GST implementation besides losses related to stent and implants regulation. EBITDA de-grew 10.3% YoY to | 52...

Q3 revenue was up 22% YoY on strong volume growth, but EBITDA slipped 2% YoY on (1) EBITDA loss of ~Rs 70 mn at its recently-commissioned children's hospital in Mumbai and (2) investments on talent acquisition especially at its new hospitals.

Revenues grew 22% YoY to | 554 crore mainly due to an improvement in ARPOB and occupancy rates. However, revenues were below I-direct estimate of | 587 crore mainly due to lower-thanexpected ARPOB (80 lakh vs. I-direct estimate of 84.8 lakh) and lower...

Blended model of affordable + high-quality services Narayana Hrudayalaya (NHL) has a legacy model based on affordability over the years. Due to strict control over costs and capital, the company was making reasonable profits. However, as it looks to scale up in other regions, where the consideration for quality has more weight than affordability, the model is likely to be modified from 'affordable'' to a mix of affordable + quality at premium. Cases in point are the recent acquisition of Gurugram hospital and buying out of partner in the Cayman...

ICICI Securities Ltd | Retail Equity Research We met the management of Narayana Hrudayalaya (NHL) to understand its business model and future prospects. NHL was founded by cardiac surgeon Dr Devi Prasad Shetty in 2000. The company operates as a chain of multispecialty, tertiary and primary healthcare facilities. NHL has a strong legacy in cardiac and renal sciences. Cardiac sciences alone contributed 42% to FY17 sales. The company has a strong presence in Karnataka and Eastern India. NHL is also growing in western and central India. The...

While Narayana Hrudayalaya's (NH) Q2FY18 revenue was up 15% YoY, EBITDA slip (8% YoY decline) can largely be attributed to (1) EBITDA loss of ~Rs 80 mn at its recently-commissioned children's hospital in Mumbai and (2) Price control on cardiac stents which impacted profitability by ~Rs 70 mn.

Blip in Narayana Hrudayalayas (NH) Q1FY18 financials can largely to attributed to (1) Price control on cardiac stents (cardiac contributes 44% to revenue) which impacted profitability by ~Rs 100 mn and (2) EBITDA loss of ~Rs 70 mn at its recently-commissioned childrens hospital in Mumbai.

Narayana Hrudayalaya's (NH) growth momentum continued in FY17 with 30% YoY growth in EBITDA to Rs 2.3 bn (in line).We believe NH is entering a strong growth phase (~20% revenue CAGR over FY17-20), as it continues to pursue an asset light expansion coupled with higher capacity utilization.

In a seasonally tepid quarter, Narayana Hrudayalaya's (NH) growth momentum was hurt by demonetization (~60% of NH's revenue is from walk-in patients).