Narayana Hrudayala - Q1FY21 Result Update - YES Securities

REDUCE (Target Rs265, Downside 8.5%)

Narayana clocked largely in line quarter as guided in the April update and subsequent Q4 call. While EBIDTA loss was expected given that April revenue run rate was just 35% of pre COVID level (with pick up in May and June), management remains cautious on revival due to high degree of uncertainty. Costs cuts, like in pharma, would be visible but no permanent savings feasible; as revenues rebound, so will costs. With no visibility on resumption of international flights and uncertainty on domestic rebound in elective surgeries, FY21 will be a wash-out year as expected with strong recovery built in FY22. We raise our FY22 estimates (~+9%) and retain Reduce mostly due to lack of comfort on valuation as we reckon hospital players should trade at a discount to branded pharma companies especially those with sizable India revenues. Key risk to our EBIDTA/EPS estimates is faster than expected 27% growth in hospitals revenues assumed in FY22.

Shares of Narayana Hrudayalaya Ltd was last trading in BSE at Rs.304.75 as compared to the previous close of Rs. 303.2. The total number of shares traded during the day was 7441 in over 579 trades.

The stock hit an intraday high of Rs. 308.45 and intraday low of 299. The net turnover during the day was Rs. 2267436.

Source : Equity Bulls

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