Narayana Hrudaya (NH)
StalwartFairStock Score: 62/100 — STEADY
Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1
Key Financials
| Current Price | ₹1,832.6 |
| Market Cap | ₹37,220.08 Cr |
| P/E Ratio | 45.25 |
| ROCE | 20.75% |
| ROE | 21.48% |
| Dividend Yield | 0.25% |
| Profit Growth | 5.4% |
| Debt/Equity | 1.29 |
| Sales Growth | 80.4% |
| Free Cash Flow | ₹-339 Cr |
| Promoter Holding | 63.27% |
| 52-Week Range | ₹1,589 — ₹2,093.3 |
| Sector | Healthcare Services |
| Book Value | ₹223.4 |
Strengths
- Strong return metrics: ROE 21.48%, ROCE 20.75%, with moderate debt/equity of 0.58.
- Robust revenue momentum: 24.19% sales growth and 16.25% five-year revenue CAGR.
- High promoter holding of 63.27% aligns interests with minority shareholders.
- Healthy financial risk scores: Piotroski F-score 7/9 and Altman Z-score 5.17.
Concerns
- Negative profit growth of -1.49% despite 24% sales growth indicates margin pressure.
- Free cash flow is negative at -₹339 Cr, so reported earnings are not converting into cash.
- Valuation is rich: P/E 45.33, P/B 10.13, EV/EBITDA 117.33; Graham Number of ₹390.07 implies a margin of safety of -369.37%.
- Dividend yield of 0.25% offers negligible downside support.
AI Analysis
As a value investor, I don't ask whether a hospital is a good business; I ask what price I am paying for its future cash flows. Narayana Hrudaya passes the business-quality screen. It earns an ROE of 21.48% and ROCE of 20.75%, with moderate debt at 0.58 times equity. Promoter holding of 63.27% is reassuring, and the latest quarter’s sales of ₹2,151 Cr show the franchise is growing. Revenue growth of 24.19% and a 16.25% five-year revenue CAGR confirm that demand for its services is strong. The Piotroski F-score of 7 and Altman Z-score of 5.17 also suggest the balance sheet is not under stress. But a good business is not automatically a good investment. The price is ₹1,796.75, book value is only ₹177.45, P/E is 45.33, and EV/EBITDA is 117.33. The Graham Number is ₹390.07, meaning my margin of safety is -369.37%. Meanwhile, profit growth is -1.49% despite strong sales, and free cash flow is negative at -₹339 Cr. In other words, this year’s reported profit has not been converted into cash available to owners. A dividend yield of 0.25% will not pay me to wait. If I pay today’s price, I need near-perfect execution for many years just to earn a reasonable return. I would rather keep Narayana Hrudaya on my watchlist. When the price falls toward value, or earnings catch up dramatically, the margin of safety will return. Until then, discipline says do nothing.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer