Narayana Hrudayalaya - Result Update - ICICI Securities

Q4FY20 revenues de-grew 2.9% YoY to Rs. 742.9 crore. EBITDA margins improved 119 bps YoY to 12.9% mainly due to Ind-AS impact. Subsequently, EBITDA grew 7.0% YoY to Rs. 95.7 crore. PAT fell 67.8% YoY to Rs. 12.0 crore due to higher depreciation and interest charges on account of Ind-AS 116 implementation. On a full year basis, revenues grew 9.3% to Rs. 3128 crore and EBITDA margins expanded 346 bps to 13.5% with EBITDA up 47% YoY to Rs. 423 crore.

Valuations & Outlook

Despite Covid-related challenges that had a significant impact in the second fortnight of March and shutdown of its Cayman facility for two weeks in March, the company posted a steady topline and a substantial improvement in operational performance. In view of significant near-term headwinds due to reduced overall occupancy levels amid Covid-19, the management has charted a path to reduce costs, increase efficiency and rationalise capex. New hospitals (SRCC, Gurugram, Dharamshila) continue to see a reduction in losses due to ramp up in occupancies. The improvement in numbers in the last few quarters is also 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. We arrive at an SOTP target price of Rs. 340 by valuing matured hospitals and Cayman Islands at 10x FY22E EV/EBITDA, new hospitals & other business at 1x FY22E EV/sales.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Narayana_Q4FY20.pdf

Shares of Narayana Hrudayalaya Ltd was last trading in BSE at Rs.284.15 as compared to the previous close of Rs. 290. The total number of shares traded during the day was 9373 in over 667 trades.

The stock hit an intraday high of Rs. 295.1 and intraday low of 274. The net turnover during the day was Rs. 2621074.

Source : Equity Bulls

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