Accumulate This Multibagger Hospital Industry Stock For Target Price Of Rs 805: Geojit

Leading brokerage firm Geojit has given accumulate rating to the hospital industry stock Narayana Hrudayalaya Ltd for a target price of Rs 805. Narayana Health reported solid numbers with consolidated revenue at Rs.1,033 up 20% YoY led by strong performance in the flagship centers with 48% of domestic walk-ins.

Narayana Hrudayalaya Ltd Stock Outlook

The current market price of the stock is Rs 705 apiece with a 52-week high of Rs 775 apiece and 52-week low of Rs 492 apiece, respectively. According to Geojit, if you accumulate the stock at its current market price, it can reach the target price of Rs 805 with a potential return of 13% in a time period of 12 months. The stock has given a return of 137% in 5 years, 185% in 3 years, and 31% in 1 year.

Narayana Hrudayalaya Ltd Market capitalization

The company has a market capitalization of Rs 14,434.00 crore.

Narayana Hrudayalaya Ltd Recorded Highest Ever Revenue

NH revenues in Q1FY23 grew by 20% YoY to Rs.1,033cr reporting the highest profitability in the Indian business which has been achieved through all-round performance across the networks. The company registered an EBITDA of Rs.192 cr with an EBITDA margin of 18.6% (up 304 bps YoY). Resultantly, PAT grew 46% YoY to Rs.110 cr.

According to Geojit, "We expect a revenue CAGR of 13% over FY22-FY24E on the back of capacity addition, HCCI (Health City Cayman Islands) expansion and pick up in elective surgeries. Hence we reiterate our "Accumulate" rating based on 18x FY24E EV/ EBITDA with a target price of Rs.805.

Narayana Hrudayalaya Ltd Aggressive Capex Plans In Focus

During the year, the NH has incurred a cash capex of over Rs.100 cr. The company has guided for Rs.700-1000cr greenfield and brownfield expansion over the next three to five years. In terms of expansions, the big expansions will happen in Kolkata and in Bangalore while only departments will be added where the management has indicated inorganic opportunities.

Narayana Hrudayalaya Ltd Outlook And Valuation

According to Geojit, "Despite severe challenges due to the pandemic, Narayana Health posted strong numbers in Q1FY23 owing to strong trajectory in the flagship hospitals contributed by rising international patient mix. Rising footfall from patients, capacity additions in existing units and expansion in the hospitals at Cayman Island is expected to support growth prospects of the company. Hence, we reiterate our "Accumulate" rating based on 18x FY24E EV/EBITDA with a target price of Rs. 805."

About Narayana Hrudayalaya Ltd

Narayana Health Ltd (NH) is a chain of multi-specialty hospitals operating in India and the Cayman Islands. Narayana Hrudayalaya Limited, the flagship company of the Group, was incorporated on 19th July 2000 by Dr. Devi Prasad Shetty as its founder. It has a network of 23 multispeciality and super speciality hospitals with 7 heart centres spread across 18 locations in India and 1 multispecialty hospital in Cayman Islands.

Disclaimer

The stock has been picked from the brokerage report of Geojit Financial. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.