Revenue jumps 78.05%, but operating margin falls to 17.50%
Costs grew faster than revenue both YoY and QoQ, while higher interest and tax rates limited the benefit to net profit.
Filed 31 Jul 2026, 19:28 IST · after market close · Narayana Hrudayalaya Ltd (NH)
Key takeaways
- Consolidated revenue rose 78.05% YoY, but expenses grew 89.17%, narrowing operating margin by 4.86 percentage points to 17.50%.
- Net profit increased only 5.37% YoY as interest expense rose 92.21% and the tax rate climbed 5.21 percentage points.
- Operating margin fell 2.16 percentage points QoQ to 17.50%, leaving Narayana Hrudayalaya 7.00 percentage points below the 24.50% median for 26 healthcare peers.
Price around the results
Revenue momentum did not translate into profit growth
Consolidated revenue grew 78.05% YoY and 3.46% QoQ, but operating profit rose only 39.40% YoY and fell 7.90% QoQ. The gap reflects costs growing faster than revenue: expenses increased 89.17% YoY and 6.24% QoQ. Net profit consequently rose just 5.37% YoY and declined 7.46% QoQ.
Interest and tax diluted operating performance
The operating margin narrowed 4.86 percentage points YoY and 2.16 percentage points QoQ because costs outpaced revenue growth. Interest expense rose 92.21% YoY, although it fell 4.91% QoQ, while depreciation increased 85.15% YoY. The QoQ tax-rate decline of 1.54 percentage points provided some support, but the YoY tax-rate increase of 5.21 percentage points further limited net profit; other income contributed 13.53% of profit before tax.
Margin remains below peers after a volatile year
The 17.50% operating margin was 7.00 percentage points below the 24.50% median among 26 healthcare peers that had reported, placing the company sixth from the bottom. Margin has been volatile across the reported quarters, moving from 24.25% in Q4FY25 to 22.36%, 24.49%, 17.07%, 19.66% and now 17.50%. The latest decline follows the QoQ recovery in Q4FY26 rather than marking a third straight quarterly fall.
Expansion pipeline remains large, with some timelines shifted
Management said the HSR Bengaluru project is planned to add 215 beds at a project cost of Rs 4,900 million, with completion targeted for FY28, while the Raipur expansion is planned to add 300 beds at Rs 5,400 million with the same target year. The company also said timelines for the 350-bed Rajarhat Kolkata, 220-bed Central Bengaluru and 350-bed South Bengaluru projects have shifted while approvals and design work continue. Management reported a GBP 1.1 million loss from the new UK centre in Q1FY27, while CIHL recorded EBITDA of negative US$3.7 million.
No immediate share-price reaction is covered
The consolidated results were filed after market close on 31 Jul 2026, so there is no immediate market reaction to assess. Across eight previous result reactions, the stock rose three times and fell five times, with a median absolute move of 4.55%, indicating that post-result moves have usually been material and more often negative.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,684 cr | ₹2,594 cr | +3.46% | +78.05% |
| Other income | ₹35 cr | ₹29 cr | +21.47% | +49.14% |
| Expenses | ₹2,214 cr | ₹2,084 cr | +6.24% | +89.17% |
| Operating profit | ₹470 cr | ₹510 cr | -7.90% | +39.40% |
| Operating margin (%) | 17.50% | 19.66% | — | — |
| Interest | ₹87 cr | ₹91 cr | -4.91% | +92.21% |
| Depreciation | ₹156 cr | ₹154 cr | +1.50% | +85.15% |
| Profit before tax | ₹262 cr | ₹294 cr | -10.82% | +13.41% |
| Tax | ₹53 cr | ₹64 cr | -17.14% | +52.69% |
| Net profit | ₹207 cr | ₹224 cr | -7.46% | +5.37% |
| EPS (₹) | ₹10.20 | ₹11.02 | -7.44% | +5.37% |
Operating margin of 17.50% compares with a Healthcare sector median of 24.50% across 26 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Expansion
- The HSR Bengaluru greenfield project will add 215 beds at a project cost of ₹4,900 million, with completion targeted for FY28.
- The Rajarhat Kolkata greenfield project will add 350 beds at a project cost of ₹9,000 million, with completion targeted for FY29.
- The Central Bengaluru lease project will add 220 beds at a project cost of ₹1,600 million, with completion targeted for FY29.
- The South Bengaluru greenfield project will add 350 beds at a project cost of ₹8,000 million, with completion targeted for FY30.
- The Raipur expansion will add 300 beds at a project cost of ₹5,400 million, with completion targeted for FY28.
New initiatives
- Digital SOP audits have crossed 50%, enabling digitally enabled JCI audits with instant access to process guides and workflows.
Problems & risks
- The Rajarhat Kolkata project has shifted timelines despite sanctions being in place.
- The Central Bengaluru project has shifted timelines while design and approvals are underway.
- The South Bengaluru project has shifted timelines while design and approvals are underway.
- The United Kingdom EBITDA includes a GBP 1.1 million loss from the new centre in Q1 FY27.
- CIHL reported EBITDA of negative US$3.7 million in Q1 FY27.
What to watch
- Whether operating margin moves back above 17.50% after the 2.16 percentage-point QoQ decline.
- Whether expense growth falls below the 6.24% QoQ revenue growth gap after costs rose 6.24% against revenue growth of 3.46%.
- Progress on management's stated FY28 projects, including the 215-bed HSR Bengaluru expansion and the 300-bed Raipur expansion.