Narayana Hrudayalaya rallies 16% on strong March quarter results

Shares of Narayana Hrudayalaya rallied 16 per cent to Rs 507.60 on the BSE in intra-day trade on Tuesday after posting strong results wherein the company's consolidated profit after tax (PAT) in March quarter (Q4FY21) jumped nearly 6-fold at Rs 68 crore, on the back of healthy operational performance. The company, a leading healthcare service provider in India, had recorded profit of Rs 12 crore in Q4FY20.

Revenues grew 12.8 per cent year on year (YoY) to Rs 838 crore with India sales growing 9.5 per cent YoY to Rs 700 crore. On the EBITDA (earnings before interest, taxes, depreciation, and amortization) front, margins expanded 399 basis points (bps) to 16.9 per cent amid lower employee and other expenditure.

The management said the flagship facilities were finally gaining traction in Q4, and that "we have been able to achieve this on the back of all-round growth registered by hospitals across the network in India as well as overseas operations at Cayman Islands".

Narayana Hrudayalaya is one of the leading healthcare service providers in India, operating a chain of multispecialty, tertiary and primary healthcare facilities. The Company has a network of 21 hospitals and 4 heart centres across India and single hospital at Cayman Islands and a heart centre at Chittagong, Bangladesh with over 5,900 operational beds across all its centres and potential to reach a capacity of over 6,700 beds.

“Despite Covid-related challenges, the company posted a strong operational performance. In view of near-term uncertainties amid Covid-19, the management has charted a path to reduce costs, increase efficiency and rationalize capex. New hospitals (SRCC, Gurugram, Dharamshila) continue to see a reduction in losses due to ramp up in occupancies,” ICICI Securities said in a note.

The improvement in numbers over the last few quarters is on the back of judicious case mix identification (more focus on oncology, transplants and non-invasive procedures). We continue to believe in the long term prospects of the company on the back of asset-right model and affordability philosophy, the brokerage firm said.

At 11:53 am, the stock was trading 14 per cent higher at Rs 501.55 on the BSE, as compared to 0.17 per cent decline in the S&P BSE Sensex. It hit a 52-week high of Rs 524.10, on February 8, 2021. The trading volumes on the counter jumped over 10-fold with a combined 4.6 million shares changing hands on the NSE and BSE.