Narayana Hrudayalaya posts 7.3% revenue growth in Q2 FY25

Narayana Hrudayalaya Limited, one of India’s leading healthcare service providers, reported a 7.3% year-on-year increase in revenue for the second quarter of FY25, reaching an impressive ₹ 14,000 million. The company’s latest financials reflect a resilient performance, bolstered by increased domestic patient footfalls, despite a drop in international inflows due to geopolitical tensions.

Company Performance at a Glance

Narayana Hrudayalaya Limited’s financial results for the quarter ended September 30, 2024, reveal strong growth amid challenging global conditions. The company saw consolidated operating revenue rise by 7.3% year-on-year, from ₹ 13,052 million in Q2 FY24 to ₹ 14,000 million in Q2 FY25. Additionally, the EBITDA increased slightly by 1.7%, reaching ₹ 3,320 million, reflecting a stable EBITDA margin of 23.7%.

However, the company’s profit after tax (PAT) declined by 12.3% year-on-year, from ₹ 2,267 million to ₹ 1,988 million. This dip was mainly attributed to reduced international patient volumes and upfront costs related to newer hospitals.

India vs. Cayman Islands Revenue

Narayana Hrudayalaya’s Indian operations experienced significant growth, with revenue jumping by 11% year-on-year to ₹ 11,684 million in Q2 FY25. In contrast, revenue from their Cayman Islands operations dropped by 7%, from ₹ 2,607 million in Q2 FY24 to ₹ 2,423 million in Q2 FY25. The company cited geopolitical issues affecting international patient inflows as a primary reason for the decline in Cayman revenues.

Expert Insight: Sustainable Margins and Domestic Focus

Dr. Emmanuel Rupert, Managing Director and Group CEO of Narayana Hrudayalaya, expressed satisfaction with the quarter’s performance, despite challenges. He highlighted that the company achieved its highest-ever revenue on a quarterly basis, largely driven by domestic growth. The CEO noted that Narayana Hrudayalaya’s focus on domestic expansion has helped offset the slowdown in international segments.

“Despite the decline in international patient numbers, we have managed to sustain profitability due to increased local patient footfalls and optimization measures,” Dr. Rupert noted, adding that the company remains confident about meeting its full-year financial goals.

Operational Highlights: Key Surgeries and Medical Breakthroughs

Narayana Hrudayalaya has made significant medical advancements during Q2 FY25. Among the notable achievements was Karnataka’s first-ever ankle replacement surgery at the Mazumdar Shaw Medical Centre in Bengaluru. Additionally, the Rabindranath Tagore International Institute of Cardiac Sciences in Kolkata successfully performed embolization on a 64-year-old patient with complex arterio-venous malformations.

Another impressive milestone was achieved by the Narayana Institute of Cardiac Sciences, which performed 113 robotic cardiac surgeries in the quarter, showcasing the company’s technological advancements in the healthcare domain.

Future Outlook and Challenges

Dr. Rupert also addressed the future, mentioning that the costs incurred for setting up new hospitals have impacted short-term profitability but are expected to normalize in the upcoming quarters. He reaffirmed the company’s commitment to growth, both domestically and internationally, emphasizing that the operational challenges are transient and Narayana Hrudayalaya remains well-positioned for long-term success.

Stock Market Sentiment

Following the announcement of Narayana Hrudayalaya’s quarterly results, market sentiment around the stock appeared mixed. The company’s shares saw minor fluctuations in the hours after the press release, reflecting investor concerns over declining profit margins. However, analysts have largely maintained their positive outlook on the company, given its sustained revenue growth and strategic expansion plans in India.