Narayana Hrudayalaya (NH) Q2 24/25 earnings summary

Executive summary

• Outpatient services at the new Cayman facility were commissioned, with full hospital launch expected in four weeks; most costs are already being incurred, but revenue ramp-up will follow commissioning.

• Q2 FY25 consolidated operating revenue reached INR 14,000 Mn, up 7.3% YoY and 4.4% QoQ, with EBITDA at INR 3,320 Mn (23.7% margin) and PAT at INR 1,988 Mn (14.2% margin).

• India business saw strong revenue growth, especially in new hospital clusters, with a 13% year-on-year increase and positive EBITDA margins in Mumbai and Gurugram.

• CapEx of INR 9 billion is earmarked for greenfield and inorganic growth, with major projects in Kolkata, Bangalore, and Raipur, targeting 1,500 new beds over four years.

• Board approved unaudited standalone and consolidated financial results for the quarter and half year ended September 30, 2024, with a clean limited review report from auditors.

Financial highlights

• India operations revenue grew 10.9% YoY to INR 11,677 Mn; domestic revenue rose 13.5% YoY, while international revenue declined 19% YoY.

• New hospital cluster revenue crossed INR 130 crore for the quarter, with an EBITDA margin of 11%.

• India inpatient ARPP grew 14.5% year-on-year, driven by a shift to domestic patients and more complex procedures.

• Standalone revenue from operations for H1 FY25 was ₹18,060.52 million, up from ₹16,488.27 million year-over-year; Q2 FY25 revenue was ₹9,342.91 million, up from ₹8,520.30 million in Q2 FY24.

• Consolidated net debt to equity ratio stood at 0.08 as of September 30, 2024.

Outlook and guidance

• Margin dilution at the new Cayman hospital is now expected to last four-to-five quarters post-commissioning, improved from earlier six-to-eight quarters.

• 850+ beds are in the pipeline for H2 FY25, with digital transformation and expansion into new clinics and geographies underway.

• Management continues to focus on cost management, clinical capability enhancement, and digital transformation initiatives.

• No formal growth guidance provided, but management aims to maintain healthy EBITDA and realization per patient.

• Tax rate expected to remain stable, with Cayman at zero tax and India at standard rates; mix will influence ETR.