NH - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.3

Narayana Hrudayalaya Ltd. (NH) has emerged as a standout performer in the healthcare space, offering robust profitability and strategic growth at a premium valuation.

🏥 Core Financials Breakdown

ROE: 24.5% and ROCE: 20.6% — exceptional return metrics; indicates strong operational efficiency and capital deployment.

EPS: ₹38.7 — high earnings per share relative to industry norms.

PAT Trend

Up from ₹194 Cr. to ₹203 Cr. — +7.8%, showing steady profitability.

Debt-to-equity: 0.67 — moderate leverage, manageable for a growth-phase healthcare provider.

Dividend Yield: 0.23% — quite low, signifying reinvestment preference over cash distribution.

📊 Valuation Indicators

Metric Value Comment

P/E Ratio 50.9 Expensive vs. industry PE of 69.2, but reflects premium positioning

P/B Ratio ~11.2 High, typical for asset-light healthcare service providers

PEG Ratio 1.61 Slightly above ideal — growth priced in, but still rational

Book Value ₹177 Tangible net worth solid but valuation far exceeds it

Verdict: Priced for growth. Overvalued on conventional metrics, but justified if future expansion sustains earnings velocity.

🧬 Business Model & Competitive Edge

Focused on affordable cardiac and complex surgeries with high patient turnover, pan-India reach, and expanding international presence.

Leverages asset-light hospital management, operational automation, and cost-effective treatment protocols.

Strong brand in Tier II/III cities; moat in specialized procedures and medical efficiency.

Risks: dependency on few flagship hospitals, regulatory changes, and capex execution.

📉 Technical Indicators

RSI: 52.1 — neutral zone; stock not overheated.

MACD: 11.7 — bullish momentum building.

Trading above DMA 50 & 200 — confirms sustained medium-term strength.

Volume slightly below average — may indicate consolidation or low conviction rally.

🎯 Entry Zone & Investment Strategy

Suggested Entry Range: ₹1,880–₹1,940 — slightly below current price; ideal if short-term weakness emerges.

Holding Thesis

Long-term hold (3+ years) for compounding growth in Indian healthcare demand.

Best suited for growth-focused portfolios rather than yield seekers.

Monitor expansion plans, capex performance, and profitability scalability.

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