Prabhudas Lilladher's research report on Narayana Hrudayalaya
NARH have announced 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 our estimates and ‘Buy’ rating with TP of Rs773/share, based on 20x FY24E EV/EBITDA for India business and 16x EV/EBITDA for Cayman hospitals. At CMP, stock is trading at 15.7x EV/EBITDA (adj for IND AS) and 26x P/E on FY24E. With strong performance at Cayman, steady pick up in mature India hospitals and ramp-up at new hospitals, we expect EBITDA CAGR of 18% over FY22-24E. Despite capex intensity going up, RoE/RoCE will remain healthy at 24% by FY24E.
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