Prabhudas Lilladher's research report on Narayana Hrudayalaya
NARH reported highest ever profitability in Q1 from its India biz which is sustainable. We see decline in Cayman profitability as blip and should recover from Q2. Our FY23E and FY24E EBITDA stands increased by 7% and 6%. NARH continues with aggressive capex plan across India and Cayman operations over next 2-3 years. This enhances growth visibility beyond FY24 however, in near term it may increase debt and impact return ratios.
Outlook
We maintain a ‘Buy’ rating with TP of Rs. 810/share (earlier Rs773/share), based on 20x FY24E EV/EBITDA for India business and 16x EV/EBITDA for Cayman hospitals. At CMP, stock is trading at 16x EV/EBITDA (adj for IND AS) and 26x P/E on FY24E. We expect EBITDA CAGR of 21% over FY22-24E. Despite capex intensity going up, RoE/ RoCE will remain healthy at ~25% by FY24E.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!