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Core markets strong, global performance improving: NARH is entering into a structurally stronger growth phase driven by India’s asset-light scalability, Cayman’s integrated hospital-insurance ecosystem and the UK’s operational turnaround. With rising realisation, expanding clinics, capacity expansion, Cayman revenue scaling up and technology-led efficiency gains, the company is positioned for sustainable multi-geography growth and long-term margin expansion.

View and valuation: We project revenue/EBITDA/APAT to expand at a CAGR of 21.9%/25.4%/32.2% over FY26–FY29E. Changing our valuation multiple to 20x EV/EBITDA on FY28E (incorporating the UK acquisition, which is contributing ~30% of total revenue and operate at an EBITDA margin of ~10% in FY26 compared to NARH which operates at ~24% EBITDA margin), we maintain both, our target price at INR 2,500 and a ‘BUY’ rating on the stock.

Strong revenue growth overshadowed by sharp profit decline due to one-off

* Revenue grew significantly by 75.8% YoY and 20.6% QoQ to INR 25.9 Bn (vs CIE estimate of INR 22.8 Bn), driven by the highest ARPP in the quarter

* EBITDA stood at INR 5.1 Bn, up 42.6% YoY and 38.9% QoQ, with margin at 19.7%, (-458 bps YoY and +259 bps QoQ ) (vs CIE estimate of 17.6%)

* Adj PAT grew by 12.5% YoY and 33.0% QoQ to INR 2.3 Bn (vs CIE estimate of INR 2.0 Bn), with a PAT margin of 8.8%.

India business positioned for multi-year growth acceleration: NARH’s India business is entering into a structurally stronger growth phase led by clinics, digital infrastructure, case-mix improvement and operating efficiency along with aggressive bed addition. The company is targeting an increase in overall bed capacity from 5,750 beds currently to 7,600+ beds by FY30 with a cumulative capex outlay of INR 30 Bn. India operations continue to run at 60–65% occupancy, resulting in a meaningful headroom for volume growth. The management is doubling clinics, from the existing 11 centres in Bengaluru, while expanding into Kolkata in FY27E. Simultaneously, focus on advanced procedures, improved payor mix and higher ARPP continues to support strong realisation-led growth and margin resilience across the India business.

Cayman integrated care platform steers next growth leg: NARH’s Cayman business is evolving into an integrated hospital-and-insurance ecosystem with strong long-term growth potential. Insurance premium revenue has already reached an annualised USD 60 Mn run rate in around a year, significantly ahead of expectation. Hospital revenues have scaled up, from below USD 30 Mn to nearly USD 50 Mn quarterly run rate, supported by the Camana Bay expansion and One Health integration. We expect growth to normalise from current doubledigit level while the profitability is anticipated to remain stable.

UK acquisition offers large multi-year margin opportunity: NARH’s UK acquisition is positioned as a long-term turnaround opportunity. Reported margin dilution includes ~200 bps one-offs, implying normalised EBITDA margin near 22%. We expect operational improvement through stronger private-pay partnerships, consultant engagement and efficiency gains from the Athma technology platform.

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