Narayana Hrudayalaya (NH) Q2 24/25 earnings summary

Executive summary

• 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).

• Outpatient services at the new Cayman facility began recently; full commissioning expected in four weeks, with most costs already incurred and revenue ramp-up anticipated soon.

• India business saw strong revenue growth, especially from new hospitals, with a 13% year-over-year increase and improved EBITDA margins.

• Notable clinical achievements include 113 robotic cardiac surgeries and several first-of-its-kind procedures in Bengaluru and Kolkata.

• International patient inflow, especially from Bangladesh, declined due to visa restrictions, but domestic patient mix and higher-value procedures offset the impact.

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%.

• ARPP (Average Revenue Per Patient) for inpatients in India grew 14.5% YoY, reaching INR 135,100 in Q2 FY25.

• Group ROE as of September 2024 is 26.3%.

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

Outlook and guidance

• Full commissioning of the Cayman hospital expected within four weeks, with margin dilution now forecasted for four-to-five quarters instead of six-to-eight.

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

• Revenue and margin growth in India expected to continue, with a focus on efficiency, higher-value procedures, and payer mix optimization.

• Capex for FY25 is projected to focus on facility transformation, medical equipment, and new investments in land and clinics.

• Tax rate expected to remain stable, with Cayman at zero tax and India at standard rates.