Company Update - Narayana Hrudayalaya - ICICI Direct

Narayana Hrudayalaya's (NH) subsidiary - Health City Cayman Islands (HCCI), already running a hospital at East End, Grand Cayman, Cayman Islands, is establishing a facility at a new location in the Camana Bay Development area of Grand Cayman. This is in order to expand the scope of super specialty treatment options already offered and offer medical services closer to the city centre. As such, the new facility, planned on a 3-acre land plot, is expected to have 50 operating beds and will be completely commercialised within two years with a capex outlay of ~US$100 million that will be funded through a mix of internal accruals and debt.

Valuations & Outlook

The expansion at Camana Bay is likely to improve HCCI's reach to patients both - international and local, due to close proximity to the airport and several major residential complexes. Significant capital outlay notwithstanding, the new facility would complement the existing set up by focusing more on day care, short stay but niche categories of oncology care while the existing facility would continue to cater to tertiary and quaternary care. We expect the impact of this blended model to materialise from FY23 onwards. NH's experience in running hospital in this region could be handy for such types of ventures. We maintain our BUY recommendation and arrive at a target price of Rs. 545 (earlier Rs. 580) based on SOTP.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Narayana_CoUpdate_Feb21.pdf

Shares of Narayana Hrudayalaya Ltd was last trading in BSE at Rs.462.2 as compared to the previous close of Rs. 458.65. The total number of shares traded during the day was 19643 in over 1041 trades.

The stock hit an intraday high of Rs. 477.8 and intraday low of 456. The net turnover during the day was Rs. 9138524.

Source : Equity Bulls

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