NH - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 3.9

📊 Financials: NH shows strong profitability with ROE at 21.0% and ROCE at 19.4%, reflecting efficient capital use. Debt-to-equity ratio of 0.69 is moderate, manageable but worth monitoring. EPS stands at ₹22.7, supported by quarterly PAT growth from ₹87.4 Cr. to ₹138 Cr. (+30.6%). Dividend yield is low at 0.24%, offering limited income support.

💹 Valuation: Current P/E of 84.7 is significantly above industry average of 51.8, suggesting overvaluation. Book value of ₹114 gives a P/B ratio of ~16.9, which is expensive relative to fundamentals. PEG ratio of 1.83 indicates valuation stretched compared to growth. Intrinsic value appears lower than current price, limiting margin of safety.

🏥 Business Model: NH operates in healthcare services, benefiting from rising demand for quality medical care and expansion opportunities. Competitive advantage lies in brand reputation, specialized services, and sectoral growth tailwinds, though valuations remain aggressive.

📈 Entry Zone: Current price ₹1,926 is near support at ₹1,868. Entry zone recommended between ₹1,850–1,900 for accumulation. Long-term holding is suitable for growth-focused investors, though high valuations warrant cautious allocation.

Positive

• 📌 Strong ROE (21.0%) and ROCE (19.4%) indicate efficient capital use
• 📌 EPS of ₹22.7 with consistent profit growth
• 📌 Quarterly PAT growth (+30.6%) reflects improving performance
• 📌 52-week index gain of 60% highlights sectoral momentum

Limitation

• ⚠️ Very high P/E (84.7) compared to industry average (51.8)
• ⚠️ Expensive P/B ratio (~16.9)
• ⚠️ Low dividend yield (0.24%) offers limited income support
• ⚠️ PEG ratio of 1.83 suggests stretched valuation relative to growth

Company Negative News

• 📉 Decline in DII holding (-0.33%) reflects reduced domestic institutional confidence
• 📉 Valuation multiples remain significantly above peers

Company Positive News

• 📈 Quarterly PAT improved from ₹87.4 Cr. to ₹138 Cr.
• 📈 Increase in FII holding (+0.03%) shows foreign investor confidence
• 📈 Strong brand positioning in healthcare sector supports long-term growth

Industry

• 🏥 Healthcare sector supported by rising demand and government initiatives
• 🏥 Industry P/E at 51.8 highlights NH’s premium valuation compared to peers

Conclusion

✅ NH is fundamentally strong with efficient returns and profit growth, but valuations are stretched. Entry around ₹1,850–1,900 offers limited margin of safety. Long-term holding is suitable for growth-focused investors, though cautious allocation is advised due to high multiples and low dividend support.

Would you like me to extend this into a peer benchmarking overlay comparing NH with other healthcare companies, or a basket scan to identify compounding opportunities across the healthcare sector?