Analysis of Narayana Hrudayalaya – April 2025

About 15% of the heart surgeries done in India are done by our group.
Dr. Devi Prasad Shetty

Narayana Hrudayalaya is a prominent hospital chain in India. It is associated with cardiovascular surgeon Dr. Devi Shetty. The company was founded in 2000 by Dr. Shetty, who established the first hospital, Rabindranath Tagore International Institute of Cardiac Sciences, in Kolkata. Since its inception, the company has expanded its network across India and internationally. Over time, the company has diversified into other healthcare segments. With the rise in per capita income in India, healthcare expenditure per capita is also expected to increase. Health insurance penetration is increasing across the country, supported by both Union and State governments.

Business of Narayana Hrudayalaya

Narayana Hrudayalaya operates hospitals, heart centres, clinics, and dialysis centres in India and overseas. Headquartered at Narayana Health City in Bengaluru, it includes a multi-specialty hospital, Mazumdar Shaw Medical Centre, a heart centre, and an eye hospital, Narayana Nethralaya.

The company also offers integrated healthcare insurance through its subsidiary, Narayana Health Insurance Limited, under the Arya Health Plan brand. Licensed by the IRDAI on January 3, 2024, it had its first full financial year in FY24-25.

Additionally, Narayana Hrudayalaya has pharmacies near its hospitals and clinics, contributing about 6% to its revenue.

Network of Hospitals

Narayana Hrudayalaya’s network of hospitals and clinics is present in various states within India and internationally. The company operates a Health City in the Cayman Islands, functioning as a subsidiary. This facility is situated near the USA. In FY23-24, the revenue from operations at Health City Cayman Islands (HCCI) was $58 million. HCCI was established in 2010.

List of cities and towns in India where hospitals, clinics, heart centres, and dialysis centres are located:

Snapshot of Business Operations

As of 1st January 2025, the company owned or operated 19 hospitals with a total of 5611 operational beds in India. Additionally, the company ran 2 Heart Centres and 19 Clinics in India, with the heart centres having a capacity of 128 beds. The company had two facilities in the Cayman Islands. Narayana Hrudayalaya had a total capacity of 6,313 beds as of December 31, 2024.

The company employed a workforce of 19,687 individuals. Narayana Hrudayalaya had 4,255 empanelled doctors in its service. The majority of the company’s revenue for Q3FY25 was generated from the Cardiac Sciences department, followed by Oncology, Medicine and GI sciences, Renal Sciences, and Neurosciences.

Domestic walk-in patients accounted for 45% of the company’s Q3FY25 revenue. Patients covered by insurance and corporate plans contributed to 30% of the revenue. International patients represented 4% of Narayana Hrudayalaya’s revenue in Q3FY25. This was a decrease compared to their contributions of 8%, 9%, and 7% in Q3FY24, Q4FY24, and Q2FY25, respectively, which was influenced by deteriorating relations between India and Bangladesh, resulting in reduced footfall from Bangladeshi patients.

Bangalore and Kolkata were the top two revenue-generating regions for the company. Bangalore, with 1500 hospital beds, accounted for 34% of the total revenue, while Kolkata, with a capacity of 1453 hospital beds, contributed 26% in Q3FY25. The Average Revenue Per Patient (ARPP) during Q3FY25 was ₹133,500.

IIn FY23-24, the Cardiac Sciences department had over 500,000 outpatient visits and more than 76,000 inpatient admissions. The hospitals performed over 21,000 cardiac surgeries and completed 13 heart and lung transplants.

Shareholding Pattern and Management of the Company

Shareholding Pattern

As of December 31, 2025, the promoters of the company owned 63.85% of the outstanding shares. Dr. Devi Prasad Shetty held 11.66% of the shares, while 35.38% of the shares were held by Smt. Shakuntala Shetty, wife of Dr. Devi Shetty. The three sons of Dr. Devi Shetty each owned 5% shares. Public shareholders included Mutual Funds, which held 5.54% of the company, and Foreign Portfolio Investors (FPIs), which held 9.44%. Dr. Kiran Mazumdar Shaw held 2.3% of the shares of the company.

Shareholder	Percentage of Shares
Promoters	63.85%
Dr. Devi Prasad Shetty	11.66%
Smt. Shakuntala Shetty	35.38%
Three sons of Dr. Devi Shetty	5% each
Mutual Funds	5.54%
Foreign Portfolio Investors (FPIs)	9.44%
Dr. Kiran Mazumdar Shaw	2.3%

Management of Narayana Hrudayalaya

The board of directors is chaired by Dr. Devi Prasad Shetty, who serves as Chairman and Whole Time Director. Other non-Independent Directors include Mr. Viren Prasad Shetty, Executive Vice-Chairman; Dr. Emmanuel Rupert, Managing Director and Group CEO; Dr. Kiran Mazumdar Shaw, Non-Executive Director; and Dr. Anesh Shetty, Additional Director.

Financials of Narayana Hrudayalaya

The revenue of the company increased by 271% between FY14-15 and FY23-24. The PAT of Narayana Hrudayalaya also rose significantly from ₹6 crore in FY14-15 to ₹790 crore in FY23-24. Over the last three financial years, the PAT has grown consistently and reached a level of stability.

In recent years, the company has maintained a gross margin of over 60%. The Net Profit Margin (NPM) has been over 13%, with the NPM in FY23-24 reaching 15.73%. In the first three quarters of FY24-25, the company maintained an NPM of more than 13.5%.

The ROE of Narayana Hrudayalaya has achieved stability. Since FY21-22, the company’s ROE has been over 23%.

Narayana Hrudayalaya reports a Return on Equity (ROE) of 24% and a Price to Book Value ratio of 10.41. As of September 30, 2024, the company’s debt stood at over ₹1,500 crore. Furthermore, the company maintains reserves amounting to ₹3,000 crore and cash and cash equivalents totalling ₹246 crore.

The stock of Narayana Hrudayalaya is currently trading at a trailing twelve-month Price to Earnings (PE) ratio of 42.56. Over the past three and five years, the stock has delivered returns of 124% and 495%, respectively.

Listed Peers of Narayana Hrudayalaya

Apollo Hospitals is the second-largest hospital group by market capitalization and runs the largest chain of offline pharmacies. It is expanding into retail healthcare using digital technology.

Max Healthcare’s stock trades at a trailing twelve months (TTM) PE multiple of 108. Max Healthcare operates hospitals in the Delhi NCR region, Maharashtra, Punjab, Uttar Pradesh, and Uttarakhand.

Fortis Healthcare is another prominent hospital chain. Fortis Healthcare’s network spans across the Delhi NCR region, Punjab, Rajasthan, Karnataka, Haryana, and West Bengal. The company experienced a 49% increase in Q3FY25 compared to Q3FY24. The stock trades at a PE multiple of 65, with a return on equity (ROE) of 10.51% as of December 2024.

Global Health Limited, known as Medanta, was founded by renowned cardiovascular surgeon Dr. Naresh Trehan in 2009. It is among the largest multi-speciality tertiary healthcare providers in India. Medanta operates hospitals in the Delhi NCR region, Uttar Pradesh, Bihar, Jharkhand, and Madhya Pradesh. Medanta’s stock trades at a TTM PE multiple of 66, and the company’s profit after tax (PAT) grew by 16% in Q3FY25 compared to Q3FY24.

Conclusion

Narayana Hrudayalaya’s strong financial performance, revenue growth, profitability, and stable return on equity highlight its strength in healthcare. The company’s high margins and consistent PAT growth show effective management and strategy. With solid reserves and substantial stock returns, Narayana Hrudayalaya is set to continue delivering value to stakeholders.

References

• Website of Narayana Hrudayalaya
• Page of Narayana Hrudayalaya on MoneyControl
• Page of Narayana Hrudayalaya on BSE website
• Investor Presentations of Narayana Hrudayalaya
• Annual Reports of Narayana Hrudayalaya
• Data collated and analysed by IndiaOne Finance
• IRDAI annual report for FY23-24