Narayana Hrudayalaya (NH) was incorporated by renowned cardiac surgeon Dr. Devi Prasad Shetty in 2000. The company was started as a predominant cardiac care hospitals group initially. Gradually, it also diversified into other specialties although cardiac still remains the mainstream specialty. NH operates a network of hospitals, diagnostic centers, clinical or test centers. It offers medical, surgery and diagnostics and supports services.

1. 16th Aug. 2019 CMP - 249.95
Narayan Hrudayalaya
Quarter 1 FY19
Result Update
Market cap (Cr.) 5021
Enterprise value
(Cr.) 5787
52 Week High (Rs) 320.5
52 Week Low (Rs) 212
PE (x) 138.7517
Promoter % 63.85
FII % -
Free Float % 36.15
Total shares (Cr.) 20.4631
- Revenues grew 25.2% YoY to 652.3 crore mainly due to
consolidation of Health City Cayman Islands Ltd
(Cayman) and incremental revenues from new hospitals.
- EBITDA margins declined 240 bps YoY to 7.3% mainly
due to higher employee expenses.
- EBITDA de-grew 5.9% YoY to 47.4 crore. Net loss was
at 4.1 crore against net profit of 10.9 crore in Q1FY18
due to lower margins, lower other income and higher
interest cost and depreciation.
- Occupied beds at Mumbai hospital were at 60,
Dharamshila at 90.
- Health city at Bangalore has 700 operational beds each
at heart hospital and multispeciality hospital.
Occupancy rate at heart hospital was at 70% and at
multispecialty at 55%.
- Lower occupancy reported in the three to five years’
category mainly due to – 1) lower occupancy at
Whitefield Bangalore due to ongoing metro work in the
vicinity, 2) lower occupancy at Guwahati due to ongoing
local issues and challenges in acquiring clinical talent.
- Dharamshila has slipped into losses from profits at
the EBITDA level due to addition of clinical talent
besides starting of cardiac initiatives.
- At Dharamshila, almost ~75% of YoY revenue growth
was attributable to the cancer business.
- The management expects EBITDA breakeven of new
hospitals (EBITDA loss- 20 crore in Q1FY19) in the next
18-24 months.
- The management expects FY19 to be more challenging
vis-à-vis FY18 in terms of profitability.
- Health City Cayman Islands (HCCI)- lower ARPOB YoY
due to change in case mix and issues within island

2.
ambulance system (lower acute emergencies). The
management expects to improve the same in the next
quarter or two.
- HCCI- The company is contemplating tie ups with
neighbouring countries such as Bahamas, Honduras,
Trinidad & Tobago besides targeting local Cayman
population to improve occupancy.
- HCCI- EBITDA margins were down due to certain
one-off charges to the tune of US$0.59 million.
Financial Highlights
Inc / Exp Performance
Particulars 201803 201703 201603
Gross Sales 1847.58 1645.92 1470.03
Total Income 1866.21 1664.06 1484.88
Total Expenditure 1665.34 1428.32 1297.39
PBIDT 200.87 235.74 187.49
Growth% -14.79 25.73 38.1
PBIT 121.66 164.34 109.89
PBT 95.41 147.33 86.47
PAT 58.42 95.11 56.68
Growth% -38.58 67.8 169.9
Cash Profit 136.47 163.32 123.43

3. Quarter Results
Description Jun-18 Jun-17 Var% Mar-18 Mar-17 Var%
Net Sales 482.63 441.09 9.42 476.37 422.73 12.69
Net Sales & Other Operating Income 482.63 441.09 9.42 476.37 422.73 12.69
Total Expenditure 452.08 395.83 14.21 440.72 367.46 19.94
(Increase) / Decrease In Stocks -1.39 -23.79 94.15 -2.28 5.21 PL
Purchase of Finished Goods 122.76 131.48 -6.63 124.41 90.24 37.86
Operating & Manufacturing Expenses 120.01 104.29 15.07 118.84 104.64 13.57
Employee Cost 99 92.31 7.25 94.26 81.01 16.36
General Administration Expenses 111.7 91.54 22.02 105.49 86.36 22.15
PBIDT (Excl OI) 30.55 45.26 -32.5 35.65 55.27 -35.5
Other Income 2.75 6.7 -58.96 5.01 6.26 -19.96
Operating Profit 33.3 51.96 -35.91 40.66 61.54 -33.93
Interest 10.21 4.56 123.96 7.71 3.82 101.97
PBDT 22.64 47.4 -52.23 32.95 57.72 -42.91
Depreciation 21.6 17.98 20.14 21.2 18.31 15.79
PBT 1.04 29.43 -96.47 11.75 39.42 -70.2
Tax 0.5 10.06 -95.07 7.41 14.97 -50.5
Profit After Tax 0.54 19.37 -97.2 4.34 24.45 -82.26
Sources of Funds
Particulars 201803 201703 201603
Equity Paid Up 204.36 204.36 204.36
Reserves and Surplus 902.89 844.88 752.72
Net Worth 1107.25 1049.24 957.08
Total Debt (Long Term plus Short Term) 491.42 119.53 151.75
Capital Employed 1612.11 1178 1108.83

4.
Application of Funds
Particulars 201803 201703 201603
Gross Block 1433.41 1067.41 967.87
Investments 560.95 354 333.59
Cash and Bank balance 21.44 28.16 18.19
Net Current Assets -31.6 17.1 -7.04
Total Current Liabilities 336.24 268.19 270.74
Total Assets 1993.85 1486.07 1381.83
Cash Flow
Particulars 201803 201703 201603
Cash Flow from Operations 194.04 218.3 177.32
Cash Flow from Investing activities -444.17 -161.93 -129.76
Cash Flow from Finance activities 225.91 -31.63 -1.52
Free Cash flow -30.39 50.57 74.03
Concluding Views:
Narayana is struggling with margins and due to various developments is still gonna experience
tight pockets for the year. Though the company looks strong for long term following its asset light
and affordability model. Given the currently going on government interventions in medical
procedures and equipments, the company seems to be moving in the right direction by following a
practice of affordability with profitability.