NH - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 3.6

📊 Financial Overview

• Profitability: PAT at ₹87.4 Cr, down from ₹160 Cr QoQ; EPS at ₹21.1
• Margins: ROCE at 19.4%, ROE at 21.0% — solid capital efficiency
• Debt Profile: Debt-to-equity ratio of 0.73 — moderate leverage
• Dividend Yield: 0.25% — minimal income return

📈 Valuation Metrics

• P/E Ratio: 83.0 — significantly above industry average of 59.6
• P/B Ratio: ~16.4 — premium valuation relative to book value ₹107
• PEG Ratio: 1.80 — suggests valuation is ahead of growth
• Intrinsic Value: Estimated around ₹1,500–₹1,600 based on earnings and sector multiples

🏢 Business Model & Competitive Edge

• Core Operations: NH (Narayana Health) operates a chain of multi-specialty hospitals across India and abroad, focusing on affordable healthcare
• Moat: Strong brand, cost-efficient model, and high patient volumes
• Growth Drivers: Expansion in Tier 2 cities, international operations, and digital health initiatives

📌 Entry Zone Recommendation

• Suggested Entry: ₹1,600–₹1,650 — near intrinsic value and DMA200
• Technical Indicators: RSI at 55.8 (neutral), MACD positive — mild bullish momentum

📈 Long-Term Holding Guidance

• Hold for long-term if accumulated near support; monitor margin recovery and expansion plans
• Valuation is high, so accumulation should be cautious and phased

✅ Positive

• Strong ROE and ROCE
• FII holding increased by 0.03%
• Resilient business model with high patient throughput

⚠️ Limitation

• High P/E and P/B ratios
• QoQ PAT decline from ₹160 Cr to ₹87.4 Cr
• DII holding declined by 0.33%

📰 Company Negative News

• Q2 FY26 profit dropped due to higher operating costs and slower international performance

🌟 Company Positive News

• Expansion into new geographies and digital health platforms expected to drive future growth

🏭 Industry

• Healthcare services industry P/E at 59.6 — NH trades at a premium
• Sector driven by rising healthcare demand, insurance penetration, and medical tourism

🧾 Conclusion

• NH is a well-managed healthcare provider with strong fundamentals but currently trades at a premium
• Accumulate near support zones for long-term growth; monitor profitability and expansion execution