Narayana Hrudayalaya Limited (NH.NS) fair value

ACCE thesis

Narayana Hrudayalaya runs a network of multi-specialty hospitals in India, anchored by its cardiac surgery business, with a high-volume model that treats large numbers of heart procedures at scale. Its edge is that scale: it can spread fixed costs over a large patient base and push down unit costs in a market where specialist cardiac capacity is still thin outside the big metros. Reported revenue growth of 78.0% is the headline, though a figure that high usually reflects acquisitions, new bed capacity or a base effect, so the first job is to separate organic volume from the rest. The stock trades at 41.9x trailing earnings but 24.1x forward, which means the market is paying for earnings expansion over the next year rather than for what it has already delivered. With an operating margin of 11.7% and a gross margin of 39.8%, the case rests on operating leverage: if revenue keeps compounding and occupancy rises, margins should widen, and that is the thing to verify before going further.