NH - Narayana Hrudaya

📊 NSE: NH 🏢 Healthcare 📅 Last Updated: 12/14/2025 10:18

💰 Financial Performance

Revenue Growth by Segment

The core hospital segment saw a significant jump in revenue following the commissioning of the Camana Bay hospital, with revenue increasing from $25 million to $40 million (60% growth). Cayman operations registered a 12.8% YoY revenue growth in FY2024. Insurance revenue reached approximately $9 million per quarter, though it remains volatile due to its nascent stage.

Geographic Revenue Split

Cayman Islands operations contributed significantly to growth with a 12.8% increase in FY2024, though H1 FY2025 was flat due to hospital transitioning. The remaining revenue is primarily driven by India operations, with major upcoming expansions in Kolkata and Bengaluru.

Profitability Margins

Operating Profit Margin (OPM) improved to 23.0% in FY2024 from 21.6% in FY2023. Net profit for the year ended March 31, 2025, was INR 790.63 Cr, compared to INR 789.62 Cr in the previous year, representing a marginal growth of 0.13% despite heavy investment phases.

EBITDA Margin

Consolidated EBITDA margin for Q2 FY26 stood at 22.0% (INR 271.2 Cr). The core hospital EBITDA margin was higher at 23.8% (INR 290.3 Cr), up from 21.7% in Q2 FY25, reflecting improved operational efficiency in the hospital business.

Capital Expenditure

NH has planned a consolidated capital expenditure of INR 3,000 Cr over the next three years (FY25-FY27) for India operations. Additionally, the company spends INR 25-30 Cr annually on each of its new initiatives, NHIC and NHIL, with a total cash burn of ~INR 50 Cr recorded in H1 FY2025.

Credit Rating & Borrowing

The company maintains a 'Stable' outlook from ICRA. Total non-current borrowings stood at INR 1,966.48 Cr as of March 31, 2025, up from INR 1,195.06 Cr in 2024. The group has a working capital facility of INR 168 Cr to support liquidity.

⚙️ Operational Drivers

Raw Materials

Consumable expenses (medical supplies/medicines) represent 23% of revenue. Manpower costs for Doctors and Nurses represent 27%, while other manpower costs account for 11% of revenue.

Import Sources

Not specifically disclosed in available documents; however, medical consumables are typically sourced through a mix of domestic and international medical device suppliers.

Key Suppliers

Not specifically named in the documents, but the company manages a large-scale procurement network for hospital consumables and pharmacy items.

Capacity Expansion

The new Camana Bay hospital in Cayman saw a 50% increase in discharges and a higher increase in outpatients/daycare post-commissioning. Planned greenfield projects are underway in Kolkata and Bengaluru to expand the India footprint by FY2029.

Raw Material Costs

Consumable expenses were maintained at 23% of revenue in Q2 FY26. The company uses digitization and better case mix management to optimize these costs and improve throughput.

Manufacturing Efficiency

Efficiency is driven by increasing Average Revenue Per Occupied Bed (ARPOB) and improving occupancy rates. Cayman operations saw a volume jump of 50% in discharges following the operationalization of new blocks.

Logistics & Distribution

Distribution costs are primarily related to the pharmacy and integrated care segments, where NHIC provides end-to-end primary care experiences.

📈 Strategic Growth

Expected Growth Rate

8-9%

Growth Strategy

Growth will be achieved through a 50% increase in patient volumes at new facilities, the commissioning of 90% of departments in new hospitals, and a INR 3,000 Cr investment in Greenfield and Brownfield projects in India. The company is also scaling its insurance (NHIL) and integrated care (NHIC) arms to create a captive patient ecosystem.

Products & Services

Hospital services (surgeries, discharges, outpatients), health insurance policies, radiation oncology, primary healthcare subscriptions, and pharmacy services.

Brand Portfolio

Narayana Health, NH Integrated Care (NHIC), Narayana Health Insurance (NHIL), ATHMA, MEDHA.

New Products/Services

New radiation oncology block (operationalized May 2023) and integrated health insurance plans combined with primary care programs.

Market Expansion

Expansion is focused on the Cayman Islands (Camana Bay) and major Indian metros including Kolkata and Bengaluru with a timeline extending to FY2029.

Market Share & Ranking

NH is a leading healthcare provider in India with a strong established market position in cardiac and oncology care.

Strategic Alliances

The company operates through several subsidiaries including NH Integrated Care and Narayana Health Insurance, maintaining 100% control to ensure operational synergy.

🌍 External Factors

Industry Trends

The industry is shifting toward integrated 'payor-provider' models. NH is positioning itself by launching its own insurance arm to capture the entire patient value chain and improve long-term margins.

Competitive Landscape

Faces stiff competition from other large hospital chains like Apollo and Fortis, as well as regional players in Kolkata and Bengaluru.

Competitive Moat

NH's moat is built on cost leadership and a strong clinical brand. The integration of insurance with hospital services creates high switching costs for patients and a sustainable referral pipeline.

Macro Economic Sensitivity

Sensitive to healthcare inflation and government spending on healthcare schemes. Regulatory pricing caps are a primary macro risk.

Consumer Behavior

Increasing demand for 'end-to-end' integrated healthcare and subscription-based primary care models.

Geopolitical Risks

Cayman operations are subject to local market slowdowns and regulatory changes in the Caribbean healthcare landscape.

⚖️ Regulatory & Governance

Industry Regulations

Subject to Section 143(3)(i) of the Companies Act regarding internal financial controls and restrictive pricing regulations by Central and State governments.

Environmental Compliance

Not specifically disclosed in INR, but the company adheres to medical waste management and hospital safety standards.

Taxation Policy Impact

The effective tax rate for FY2025 was approximately 15.5% (INR 1,457.19 Cr tax on INR 9,355.38 Cr profit before tax).

Legal Contingencies

The company monitors contingent liabilities related to tax and legal claims (Note 30), though specific aggregate values for pending court cases were not detailed in the provided snippets.

⚠️ Risk Analysis

Key Uncertainties

The insurance business (NHIL) is in a nascent stage with high volatility in loss ratios, potentially impacting consolidated profitability by INR 50-100 Cr annually during the burn phase.