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Companies That Have Posted Very Good Quarterly Results, with Increases in Both Sales & Profit on a QoQ and YoY Basis

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Narayana Hrudayalaya company details

Incorporated in 2000, Narayana Hrudayalaya Limited is engaged in providing economical healthcare services. Headquartered in Bengaluru, India, the company has a network of multispecialty and super-specialty hospitals in India with a strong presence in Karnataka and eastern India as well as an emerging presence in western and central India. It owns and operates certain hospitals and enters into management agreements with hospitals under which it acquires the operating control of the hospitals on a revenue sharing basis. The company was rebranded as ‘Narayana Health’ in 2013 with a mission to deliver high quality and affordable healthcare services to the broader population by leveraging an efficient business model. The company has a network of 39 healthcare facilities, with a total bed capacity of 6,254 as on 30th June 2024. Of these, 18 hospitals are owned including subsidiaries, JVs & associates. It has 17 primary healthcare facilities (clinics and dialysis centres), 3 heart centres and 1 hospital in Cayman Island with 110 beds. NH offers a comprehensive range of healthcare services across different specialties including cardiac sciences, gastro sciences, oncology, renal sciences, neurosciences and orthopaedics.

#SALES #GROWTH 5 Year CAGR 11.9%

In FY24, sales grew by 11% YoY to ₹5,018 cr. The growth was supported by improvements across major parameters. Strong growth in flagship units, other hospitals, and healthy enhancements in performance of its newer hospitals aided further growth. Their new hospitals delivered profitable performance during the year, of which, Gurugram has been EBITDA positive from prior breakeven levels, Mumbai witnessed steady performance and and Dharamshila has consistently been growing with double-digit QoQ. In Q1 FY25, sales grew by 9% YoY to ₹1,341 cr on account of improved realizations and increased patient footfalls, further attributable by strong growth across its flagship units, followed by steady improvements across new hospitals. Geographically, India business and Cayman unit grew by ~10% and 13%, respectively. NHIC delivered strong growth across the retail segment during the quarter, led by rising patient transactions and collections.

#EBITDA #GROWTH 5 Year CAGR 32.0%

In FY24, EBITDA stood at ₹1,152 cr, clocking in a growth of ~19% YoY. Company observed a rise on the back improvement in the ARPP (average revenue per patient) for in-patients and out-patients contributed by NH India. While Cayman Islands registered a decline in ARPP for in-patients during the period. During the year, it witnessed a rise in the manpower expense due to the addition of doctors across locations and annual inflation. However, purchase of medical consumables, drugs and surgical instruments constituted ~22% of the total revenue followed by manpower expense of ~38%. EBITDA in Q1 FY25 stood at ₹304 cr, up by ~12% YoY. Q1’s are generally a low quarter on account of summer holidays and Ramzan period; however, due to the elections, the growth in ARPP was slightly tepid which is expected to get corrected in the upcoming quarters.

#PAT #GROWTH 5 Year CAGR 67.0%

In FY24, PAT stood at ₹790 cr. During the period, depreciation and finance cost witnessed a rise on a YoY basis. Finance cost rose on account of rising interest expenses towards term loans from banks. In Q1 FY25, PAT grew by ~9% YoY to ₹201 cr. During the period, finance cost increased significantly by ~62% YoY. Effective tax rate for FY25 is expected to be in the similar range of ~25%-26%; as the India business would have an ETR of ~26% going ahead due to no further credits being realized while the Cayman’s ETR would stay at ~0%. Further, depending on the mix between India and Cayman, the tax rate is expected to get moderated. Going forward, the company is focusing on ramping up their new units and would continue to derive growth prospects in their overseas business.

#EBITDA #MARGIN

In FY24, EBITDA margin was ~23%, an expansion of 162 bps YoY. The improvement was backed by better realizations, rise in the company’s ARPOB and enhancement of cost efficiencies across units, driven by rising patient volumes. Their ability to diversify case mix beyond Cardiac Sciences, especially in Oncology further helped in ramping up their mature hospitals. In Q1 FY25, EBITDA margin expanded by 72 bps YoY to ~23%. The improvement was primarily attributable towards improved realizations and enhancement of cost efficiencies across units. EBITDA margin for the new hospitals (Gurugram, Dharamshila and SRCC Hospital in Mumbai) was ~7% during the same period. Although Mumbai posted a single-digit loss which is expected to be stabilized to EBITDA breakeven in Q2 FY25. Improvement in throughput would further drive profitability, going ahead.

#PAT #MARGIN

In FY24, PAT margin was 16%, an expansion of 233 bps YoY. In Q1 FY25, PAT margin expanded by 10 bps YoY to ~15%.

#Companies #Potential

India’s healthcare industry, which comprises hospitals, medical devices & equipment, health insurance, clinical trials, telemedicine, and medical tourism, has been growing at a CAGR of ~22% since 2016, reaching over $370 billion in 2022 and is expected to reach ~$670 billion by 2026. This increase in market size is due to growing demand for specialized and higher quality healthcare services. Further, over the last 1-2 years, the healthcare sector investments mainly centered around hospitals and health tech start-ups. • The interim budget FY25, with an allocation of ₹90,171 crore towards health, aims to improve access to healthcare services and infrastructure in India. The government's announcement to establish more medical colleges via utilizing existing hospital infrastructure is expected to address manpower shortages while also increasing access to healthcare education. insurance market will drive demand for healthcare services. and provides a huge opportunity in the Healthcare market. • Health insurance propels the demand for healthcare services as insurance policies partly cover health expenses, eventually reducing the healthcare cost burden and encouraging an individual to undergo treatment. Therefore, a likely increase in the health • India offers significant opportunity for the growth of medical tourism. The market is expected to rise at a CAGR of 65%-70% between FY21-25. India is a preferred destination for Medical Value Travel (MVT) which attracts patients from all over the globe • The expanding and ageing population, rising cost of treatment, prevalence of non-communicable diseases and increasing penetration of healthcare insurance are some of the key growth drivers of the healthcare market. • Changing demographic trends, rising per capita income, rising awareness for healthy lifestyle, under-penetrated healthcare space in India, higher share of non-communicable diseases, better healthcare technology coupled with cost competitiveness are some of CASE STUDY the factors which would be aiding the growth of the healthcare industry in India.

#Companies #Outlook

Expansions- The company has been simultaneously pursuing organic and inorganic growth opportunities across both India and overseas units, thereby driving synergies from the existing operations. and is constantly exploring greenfielda and brownfield capex opportunities across both units, which would further give a better return on investments and will also aid in improving its efficiencies. The primary objective is to increase high end complex procedures across network which would improve overall ARPOB. • India • Cayman • New Business - This is expected to witness growth on the back of rising throughputs and total numbers served under the same infrastructure. The focus would be to improve the payor mix, increase efficiency & improve capacity utilization of beds. Unit - They inaugurated a new hospital (day care focused) with ~50 beds in July 2024 with patient inflows being expected to kick in before the end of Q2 FY25. Being a new building, it would have a high fixed cost, leading to dilution of margins and operational loss in the initial period. Further, they are optimistic of this Caribbean business to continue performing well with synergies between these hospitals, led by strategic initiatives and investments. hospitals - Dharamshila, Gurugram and Mumbai are likely to witness improvements in terms of margins, going ahead. • They launched Narayana Health Insurance in Mysore in late-June and expects this segment to be a narrow network operation. • The gross debt in FY25 for expansion is expected to be ~₹2,400 crore which is an addition of ₹1,000 crore YoY, while the net debt would be ₹1,000 crore.

Narayana Hrudayalaya NH 1130-1230
Expected level 1450
Support 1072

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1465 to 1700+ 💥Long term level hit

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Soon will share Diwali to Diwali pick

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