Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Narayana Hrudayalaya Ltd (BOM:539551, Financial) has successfully commissioned the outpatient facility of its new hospital, with plans to fully operationalize the entire hospital in the next four weeks.
- The company has earmarked significant CapEx towards greenfield and inorganic growth opportunities, indicating a strong focus on expansion.
- The new hospital cluster in India has shown strong revenue growth of around 13% year-on-year, with revenue crossing INR 130 crores for the quarter.
- Narayana Hrudayalaya Ltd (BOM:539551) is optimistic about reducing the margin dilution period from six to eight quarters to four to five quarters for its Cayman facility.
- The company is focusing on high-end procedures and complex surgeries, which are expected to continue contributing positively to revenue growth.
Negative Points
- The new hospital in Cayman is incurring significant costs, with 75% to 80% of costs already on the books, while revenue ramp-up is still in the early stages.
- There has been a decline in outpatient numbers and revenue per patient in the Cayman facility, attributed to factors like hurricanes and compliance obligations.
- The company faces challenges in the Bangladesh market due to visa restrictions, impacting international patient footfall and revenue.
- Narayana Hrudayalaya Ltd (BOM:539551) has experienced a decline in discharge and outpatient volumes on a year-on-year basis.
- The company is incurring a cash burn in its Integrated Care and Insurance business, with an EBITDA burn of around INR 25 crores for the first half of the year.
Q & A Highlights
Q: Can you provide an update on the new hospital unit's ramp-up and cost normalization?
A: The outpatient facility was commissioned a week ago, and we expect the entire hospital to be operational in about four weeks. Currently, we are incurring 75-80% of the total costs, with revenue ramp-up expected to follow the full-scale launch.
Q: What is the guidance for the Cayman facility's ramp-up and margin expectations?
A: We initially expected margin dilution for six to eight quarters post-commissioning. However, due to better cost control, we now anticipate this period to be four to five quarters. The outpatient services have been well-received, and we expect positive momentum once the entire hospital is operational.
Q: Can you provide a breakdown of the new hospitals' revenue and margins in India?
A: The new hospital cluster showed strong revenue growth of 13% year-on-year, with revenue crossing INR 130 crores and an EBITDA of around 11%. Mumbai and Gurugram hospitals also showed positive EBITDA, with expectations for further growth by Q4.
Q: What are the plans for CapEx and bed additions in Bangalore and Kolkata?
A: We plan to add around 1,500 beds over the next four years, with 700 beds in greenfield projects in Kolkata and Bangalore, and 150 beds in a brownfield project. We are also exploring additional greenfield projects.
Q: How is the insurance pilot project progressing, and what are the future plans?
A: The insurance pilot in Mysore has been encouraging, leading to an early launch in Bangalore. We have generated INR 1.2 million in premiums and are focusing on building distribution channels to accelerate growth in the coming quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
