The Narayana Hrudalaya share price has had a dream run in 2025. The stock is up over 20% in 2025 and even if we check the stock price over 1-year time frame, it has delivered almost similar returns to investors. Positive views from brokerages and string business fundamentals have helped enhance the stock’s appeal. Here are three reasons driving the positive sentiment in the share value –
Kotak Institutional Equities on Narayana Hrudayalaya: Steady growth in India business
The brokerage firm, Kotak Institutional Equities, has reiterated its ‘ADD’ rating on Narayana Hrudayalaya, with a price target of Rs 1,490 per share. This implies an upside of 4% from current levels. According to the brokerage, Narayana Hrudayalaya reported a strong performance in Q3FY25, driven by strong traction in its Cayman operations and steady growth in its India business.
“Aided by a further improvement in mix and higher occupancies in new hospitals, we bake in 12%/16% India sales/EBITDA CAGRs over FY2024-27E. We now expect a faster ramp-up in the new Camana Bay hospital and bake in a healthy 16% overall EBITDA CAGR over FY2024-27E,” added the brokerage in its report.
Kotak Institutional on Narayana Hrudayalaya: Cayman expansion gains momentum
One of the key highlights of Narayana Hrudayalaya’s Q3 results noted down in the brokerage report was the performance of its Cayman Islands unit, particularly the newly opened Camana Bay facility.
According to the brokerage report, the Cayman business posted a 14% YoY revenue growth in Q3, with a 21% sequential increase (QoQ). EBITDA margins have also improved, resulting in analysts to revise their expectations for a faster ramp-up at Camana Bay.
“We now bake in a faster ramp-up of this hospital,” the report notes, indicating that EBITDA breakeven could be achieved sooner than the company’s previous guidance of 4-5 quarters.
With lower than expected operational costs and strong initial demand, the brokerage now forecasts 17% revenue CAGR and 15% EBITDA CAGR for the Cayman business over FY24-27.
Kotak Institutional on Narayana Hrudayalaya: Growth in billing rates, expansion
In India, according to the brokerage house, Narayana Hrudayalaya continued to show strong performance with 13% YoY revenue growth, reaching Rs 10.7 billion in Q3. The growth was driven by a 9% YoY rise in Average Revenue Per Occupied Bed (ARPOB). While, the domestic impatient volume remained on a strong note remains, but there was a decline in international patient inflows from Bangladesh.
The brokerage in its report also pointed out that the company has laid out a long-term expansion roadmap, planning to add approximately 2,000 new beds in the next six years.
Some of the key projects include:
- 1,135 beds in Bengaluru and Kolkata by FY29
- 300 additional brownfield beds in Raipur by FY28
- Exploration of 1-2 greenfield opportunities in Bengaluru and Kolkata
The brokerage estimates capex of Rs 16.5 billion in FY25, Rs 10 billion in FY26, and Rs 8.5 billion in FY27.
Kotak Institutional on Narayana Hrudayalaya: Strong growth outlook for FY24-27
As per the brokerage report, with continued efficiency improvements in India and a ramp up in Cayman, NARH is expected to deliver a 12% CAGR in India sales and 16% CAGR in India EBITDA over FY24-27.
The brokerage also revised its EBITDA estimates for FY25-27 upward by 1-3%, citing higher sales and improved margins in Cayman.
Looking ahead, the report maintains its positive stance on NARH, stating that at its current market price, the stock’s India business is trading at an attractive valuation of approx. 20x FY26 estimated pre-Ind AS 116 EV/EBITDA.