Narayana Health can sustain positive trend in margins: CFO Sandhya Jayaraman
Shares of Narayana Hrudayalaya surged as much as 10 percent to hit a 52-week high of Rs 856 earlier today. The stock has risen 10 percent on a year-to-date basis, while it gained 30 percent in the last one year.
Multispeciality private hospital chain Narayana Health is buzzing in Monday's trade on the back of its strong fourth quarter numbers. Speaking to CNBC-TV18, Group Chief Financial Officer (CFO), Sandhya Jayaraman said the company have been able to process much higher volumes in the quarter ended March and their margin could eventually sustain above 20 percent.
Shares of Narayana Hrudayalaya surged as much as 10 percent to hit a 52-week high of Rs 856 earlier today. The stock has risen 10 percent on a year-to-date basis, while it gained 30 percent in the last one year.
According to data from Trendlyne, Narayana Hrudayalaya has an average broker target of Rs 915.33, implying an upside potential of 11 percent from the current market levels.
The Group CFO said that a couple of factors, including in patient and out patient footfalls, increased in the March quarter. This has led to the company's growth. Narayana Health reported strong revenue growth led by India business and improved margins for the March quarter.
As the December quarter witnessed a large amount of festivals, Jayaraman said that demand was seen in the fourth quarter of fiscal 2023.
"We are pushing ourselves to deliver the margins through efficiency improvements and not passing all the burden to the patients. Now, we are confident that we'll do it, but there will be a slight timing effect to that. So, we may have to take some impact in a few quarters till our efficiency catches up," Jayaraman said.
Further, the CFO added, "And then we will be able to catch up to the margin level. So we may see a slight dip and then pick up. I think we are confident that we can sustain the greater than 20 percent margin at a group level."
Narayana Hrudayalaya Q4 numbers
Narayana Hrudayalaya posted a 29.9 percent growth in revenue at Rs 1,221.6 crore for the March quarter, higher than the street estimates, of 23 percent growth. For the December quarter, revenue came in at Rs 1,128 crore.
The company reported margins of 22.6 percent for the quarter which were better than analysts estimates of 21 percent. The margins were flat on a sequential basis.
Narayana also reported a net profit of Rs 173 crore during the March quarter, higher than the expectation of Rs 161 crore. The bottom-line during the year-ago period stood at Rs 68.92 crore.
Earnings before interest tax depreciation and amortisation (EBITDA) was at Rs 275.7 crore during the March quarter, compared to Rs 175 crore in the year-ago quarter.
Growth during the quarter came predominantly from the India business, which saw revenue grow by 29 percent to Rs 977 crore from Rs 757 crore a year ago. For the full year, the India business saw revenue growth of 21 percent year-on-year.
Operating revenue of the Cayman Islands-based HCCI stood at $29.3 million during the March quarter, compared to $24.4 million in the same period a year ago .
For the full year, Narayana saw revenue growth of 22 percent as against financial year 2022.
The operating revenue of Cayman Islands-based HCCI was at $29.3 million in Q4 against $24.4 million a year ago while for FY23 the revenue was $109.2 million against $91.9 million in FY22.
The net debt stood at Rs 131 crore. The hospital chain has 45 healthcare facilities with 5,888 operational beds as of March 2023.
First Published: May 22, 2023 1:44 PM IST
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