Narayana Hrudayalaya Ltd – Expanding Globally

Company's Moto : Bringing healthcare at affordable cost.

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(A) About

Narayana - logo

NHL operates a chain of multispecialty, tertiary and primary healthcare facilities. Dr. Devi Shetty, who has over 30 years of medical experience, began NHL in 2000. The Group, which initially focused on cardiac and renal sciences, expanded to additional areas of focus such as cancer care, neurology and neurosurgery, orthopedics, and gastroenterology and was rebranded as ‘Narayana Health’ in 2013 to reflect the diversified presence.

Further, the Group owns and operates certain hospitals apart from entering into management agreements with hospitals to acquire their operational control. Moreover, NHL has a strong presence in the southern state of Karnataka and eastern India, with an emerging presence in western, central and northern India.

(B) Operational Highlights

  • Company is expanding its footprints in Cayman island hospital which will add a capacity of ~50 beds.
  • Company acquire entity which will add 100 beds in Bangalore. It provides ability to offer Orthopedics and Trauma care.
  • Company implemented a drug refill management, pre-consultation assessment and integrated discharge medication orders to further enhance the overall experience across outpatient Pharmacy.
  • During the quarter Meridian Medical Research & Hospital Ltd, Kolkata commissioned a new linear accelerator (varian true beam) to further fortify its radiation oncology work.

(C) Shareholding Pattern

Narayana - Shareholding Pattern
Narayana - Promoters shareholding
Narayana - Others shareholding

(D) Family Tree

Narayana - Devi Prasad Family tree

(E) About the Executive Management

(i) Dr. Devi Prasad Shetty- Founder & Chairman

Dr. Devi Prasad Shetty is the Chairman of our Company and also a Whole time Director. He is a cardiac surgeon with over 37 years of experience.

After completing his MBBS from University of Mysore in 1978 and Master’s Degree in 1982, meanwhile he was granted a fellowship from the Royal College of Surgeons of England in 1989. He established Narayana Hrudayalaya Ltd. in the year 2000.

Dr. Shetty is a recipient of several awards and honors, most noteworthy being “Padma Shri” and “Padma Bhushan” Awards in 2003 and 2012 respectively, conferred by the Government of India and also the Rajyotsava Award in 2002 conferred by the Government of Karnataka.

Dr. Devi Prasad Shetty received Rs 10.65 cr as remuneration for FY22, i.e., 0.28% of Net Sales and 3.11% of Net Profit.

(ii) Mr. Viren Prasad Shetty- Executive Director

Mr. Viren Prasad Shetty is the Executive Director and Senior Vice President - Strategy since 2012 and was responsible for identifying and developing new growth opportunities for Narayana.

He has been associated with Narayana since 2004. Further he has also done his post-graduate in Business Administration, from Stanford Graduate School of Business. He is also an undergraduate in civil engineering from RV College of Engineering, Bangalore. Mr. Viren Prasad Shetty further, is elected as the Vice Chairman of the Board w.e.f. 1st April 2022 and designated him as Executive Vice-Chairman.

Mr. Viren Prasad Shetty received Rs 2.52 cr as remuneration for FY22, i.e., 0.07% of Net Sales and 0.73% of Net Profit.

(iii) Dr. Kiran Mazumdar Shaw- Executive Director

Dr. Kiran Mazumdar Shaw is a Non-executive Director of our Company. Moreover, she is the executive Chairperson of Biocon Limited, an innovation-led global biopharmaceutical company, which is India’s largest publicly listed biotech enterprise.

With over 45 years of experience in the field of biotechnology, she holds a Bachelor’s degree in Science (Zoology Honors) from Bengaluru University and also a Masters’ degree in Malting and Brewing from Ballarat College, Melbourne University, Australia. Moreover, she has got several honorary degrees from universities of repute globally.

Dr. Kiran Mazumdar Shaw received Rs 0.21 cr as remuneration for FY22, i.e., 0.00% of Net Sales and 0.06% of Net Profit.

(iv) Dr. Emmanuel Rupert- Managing Director

Dr. Emmanuel Rupert is Managing Director and Group CEO.

He joined the Company in May of 2000, in the capacity of Chief Consultant - Anesthesia & as Director of Academic Services. Meanwhile, over the next 18 years, he was instrumental in building and strengthening the clinical operations across units in the Group.

Dr. Emmanuel Rupert received Rs 5.60 cr as remuneration for FY22, i.e., 0.15% of Net Sales and 1.63% of Net Profit.

(G) Revenue Segmentation

(i) Business Mix

Narayana-Business Mix

(ii) Specialty-wise Revenue breakup

Narayana - Speciality Wise Revenue

(iii) Geographical Revenue

Narayana - Geograpograph Segmentation

Cayman Island contribute to ~20% of the company's revenue while ~80% of the revenue come from India.

(iv) Regional Split – India (Q2 FY23)

Narayana - Region wise split

Bangalore, Kolkata contribute the highest of combine 60% of the company's hospital business.

(H) Operating Parameters

Narayana - ARPOB
Narayana Hrudayalaya - Payee profile

(I) Geographical presence

Narayana - Geographical presence

Company has 44 Healthcare Facilities, in which

Owned/ Operated Hospitals19
Managed Hospitals2
Heart Centers4
Primary Healthcare Facilities 18
Hospital in Cayman Island1
Total bed capacity6,490
Operational Beds6,145

(K) Cost Structure

Narayana - Cost Structure
Narayana - Employee Cost

(L) Financials

Narayana - Financials

Company’s revenue has increased at a CAGR of 16.0% while its profit after tax increases at a CAGR of 30.52% in the past 10 years. Moreover its ROE & ROCE has also improved significantly from FY13 to FY22.

Meanwhile, inspite of having a asset heavy business company is also reducing its debt to equity in the past 5 years.

Narayana - Du Pont Analysis

Company is consistently improving its PAT margins in the last 10 years. Moreover its Assets to equity improved due to reduction of debt to equity.

(M) Management Discussion & Concall


(i) Ageing population, burgeoning lifestyle diseases and also rising affordability are contributing to the Indian healthcare industry growth at 15-17% CAGR.

(ii) Moreover, Low public and limited penetration of health insurance has led to 'out of pocket' expenditure accounting for ~63% has led to 'out of pocket' expenditure accounting for ~63% of total healthcare compared to global average of ~22%.

(iii) The revival of medical tourism due to easy travel restrictions. This market is also expected to raise at a CAGR of 65-70% between FY21-FY25.

(iv) Government has also announced an open platform for the National Digital Health Ecosystem. It will consist of digital registries of health providers and facilities, unique health identity and also universal access to health facilities.


(i) Asset light business model- Compared to other hospitals its business is asset light as it does not invest in land & buildings. It tie up with like-minded charitable trust, government bodies and other non-profit organization and the hospitals are managed either on a profit sharing or fixed rental basis.

(ii) Focused on affordable + high quality healthcare services- Around 60-65% of beds of Narayana are in general ward which is highest compared to other private hospitals enable it to operate at lower costs.

(iii) Improved trajectory & Capacity Expansion at Cayman- Moreover, they own and operate health City Cayman Island which is 430 miles south of Miami and provides high quality, affordable tertiary health care at cost ~25-40% of US prices.

(iv) Improving clinical outcomes and additional saving through digital initiatives- Its platform NH-Atma provide digital infrastructure which enables patient to use their cellular phones to make payments for admission, discharge and consultation which further, reduce the cost for manpower and administration.

Q2 FY23 Concall

(i) Plan of capital outlay for India and Cayman remains on track to tune of Rs10bn in FY23. So far spend Rs3bn towards acquisition, $40mn spend for Cayman unit in FY23.

(ii) Further, company has guided for similar Rs10bn capex in FY24 largely towards India business– Brownfield expansion in Bangalore units, greenfield expansion across Kolkata and Raipur unit.

(iii) Moreover, its new hospital reported highest ever revenue across 3 units. Dharamshila reported +8% margin, while Gurgaon unit have break-even. Mumbai unit should also be break-even in next 6-9 months.

(iv)However, as on 30th September 2022, the company had a capacity of 6,490 beds out of which 6,145 beds were operational (94.68%).

(N) Strengths & Weaknesses


(i) Significant brand equity of Narayana Health

The company enjoys a strong market position in the healthcare services industry and has an established brand equity, especially in the cardiac segment. Meanwhile, its goodwill and strong brand equity among patients and healthcare professionals has helped NHL in partnering with governmental bodies, not-for-profit trusts and charities, and private organizations to operate and manage their healthcare facilities.

(ii) Spread across several geographies of India with strong presence in Karnataka and eastern India; also has international presence

Narayana Hrudayalaya has a network of 47 healthcare facilities, including 20 hospitals (multi-specialty and super-specialty healthcare facilities which provide tertiary care), two managed hospital, five heart centers (super-specialty units which are set up in a third-party hospital) and also 19 primary care facilities (including clinics and information centers), across a total of over 30 cities, towns and villages in India, with 6,181 operational beds.

(iii) Strong presence in cardiac and renal sciences with continuing diversification into other specialties

Narayana Hrudayalaya has a good reputation and strong clinical capabilities in cardiac and renal sciences. Moreover, it has been expanding its core specialty areas to include oncology, neurology and neurosurgery, orthopedics and gastroenterology. The contribution of cardiac and renal sciences to inpatient revenue has also reduced from 68% in FY2013 to 42% in 9M FY2022 reflecting increasing revenue contribution from other specialties. Due to the high value nature of the procedures targeted in the new facility, the planned radiation oncology and multi-specialty centre at Cayman Island is likely to significantly diversify the company's operations and give a substantial addition to the company's revenue and profitability.


(i) Reliance on top-three hospitals and Cayman unit for majority of the revenues and margins

The Narayana Institute of Cardiac Sciences, Mazumdar Shaw Medical Centre, Rabindranath Tagore International Institute of Cardiac Sciences, and also the Cayman unit, the Group's three best-performing hospitals in India, account for a sizeable amount of the group's revenue and EBITDA.

(ii) Stiff competition in the healthcare industry

Narayana Hrudayalaya must contend with rivalry from other hospital groups in the sector. However, it is projected that the company's strong brand equity would assist future expansion.

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References:  Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets & Management Interviews, Industry Publications.

Disclaimer: The report only represents the personal opinions and views of the author. No part of the report should be considered a recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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