ICICI Securities has upgraded Narayana Hrudayalaya to a 'Buy' rating with a price target of Rs 2,250, citing strong second-quarter financial results. The hospital operator reported a 73% surge in revenue and is focusing on expanding its bed capacity by over 1,000 units through fiscal year 2029.
ICICI Securities has upgraded Narayana Hrudayalaya to a 'Buy' rating, setting a new price target of Rs 2,250 per share. The brokerage highlighted the healthcare provider's robust operational performance in the second quarter of the 2027 fiscal year as the primary reason for this positive outlook.
During the quarter, Narayana Hrudayalaya reported consolidated revenue of ₹28,440 million, marking a significant 73% increase compared to the same period last year. The company’s operating profit, or EBITDA, also saw a strong 42% year-on-year growth, reaching ₹6,054 million with an EBITDA margin of 21.3%. This performance was supported by a 16.7% revenue growth in its core India hospital operations and improved margins across domestic segments.
The improvement in bottom-line performance was further aided by a reduction in losses within the company's Cayman Islands insurance division, which had previously been a drag on overall profitability. By scaling back these losses, the company has demonstrated better operational efficiency.
Looking ahead, the firm is aggressively pursuing a capacity expansion strategy. Narayana Hrudayalaya plans to add approximately 1,085 new beds in India by fiscal year 2029, with a total pipeline of 1,555 beds. This expansion is expected to be a major contributor to long-term earnings, provided the company can execute these projects without significant cost overruns or delays.
Investors should keep an eye on a few potential risks. The healthcare sector is subject to ongoing regulatory and pricing pressures, which can directly affect profit margins. Additionally, the company is in the process of integrating recent international acquisitions, such as its UK operations. The success of these integrations, combined with the ability to manage debt—which stood at a net level of ₹18,830 million as of September 30, 2026—will be essential factors for future stability. Shareholders may want to monitor quarterly updates on bed capacity utilization and the progress of its international insurance segment to assess whether the company maintains this momentum.