Narayana Hrudayalaya

Company Overview

• Indian hospital chain focused on affordable, high-volume healthcare

• Operates with the lowest ARPOB (Average Revenue Per Occupied Bed) among peers due to its value-focused model

• 96% of revenue comes from inpatients

• One of India’s largest bone marrow transplant centers

• High capital efficiency: lowest gross block per bed among competitors

• Industry-leading ROCE (~28%) despite low pricing due to efficient asset utilization

  
  

Industry

• Indian healthcare is characterized by a supply-demand mismatch

• India accounts for 17% of the global population and 21% of the disease burden

• Sector is growing at a 12% CAGR

• Industry often caters to premium segments; NH stands out by targeting underserved segments

  
  

Business Segments

• India Operations

  • Largest contributor to revenue and PAT

  • Focused on affordability and high throughput

  • Payer mix: 46% walk-in, 25% insured, 21% government schemes, 8% international

• Cayman Islands Operations

  • 105-bed specialty hospital

  • 40% EBITDA margins

  • CAPEX of ₹1000 crore planned for an oncology block

  • Set up to provide low-cost care for U.S. patients by employing Indian doctors (unique regulatory advantage)

    
    

Growth Drivers

• Operating leverage from increased utilization of new hospitals

• Margin expansion guidance: moving from 8.6% to double-digit margins in 3–5 years

• Cayman expansion into central city area (vs. earlier remote location) expected to improve reach and services

• ALOS (Average Length of Stay) reduction and increasing complex therapy mix

• Kolkata greenfield hospital project worth ₹2000 crore

• PAT projected to touch ₹1000 crore by FY26, making NH the 3rd hospital group to hit that milestone

• Also expanding into Barbados

Valuation

Risks

• Regulatory risks: price caps, bed allocations for government schemes

• Competitive pressure