Narayana Hrudayalaya lifts margin, but other income drives nearly half of PBT
Standalone revenue growth outpaced costs, while ARPOB rose to Rs 18.6 Mn and five expansion projects remain on the company’s timetable.
Filed 01 Jul 2026, 19:32 IST · after market close · Narayana Hrudayalaya Ltd (NH)
Key takeaways
- Standalone operating margin improved 2.58 percentage points year on year as revenue growth of 13.60% outpaced expense growth of 9.98%.
- Net profit rose 26.34% year on year, but other income contributed 48.10% of pre-tax profit and the tax rate fell 0.70 percentage points.
- The stock's recorded post-results gain of 4.55% was unusually large against its 1.93% median move after the past eight results.
Price around the results
Revenue growth translated into a wider operating margin
Standalone revenue grew 13.60% year on year, while expenses rose 9.98%, lifting operating margin by 2.58 percentage points. Sequentially, revenue increased 7.77% and expenses rose 6.99%, taking margin 0.57 percentage points higher. Management said Q4FY26 ARPOB was Rs 18.6 Mn, up from Rs 16.9 Mn in Q4FY25, providing a business-level explanation for the revenue improvement.
Profit quality was mixed despite the year-on-year improvement
Net profit grew 26.34% year on year, but other income accounted for 48.10% of pre-tax profit, so the reported profit increase was not driven only by operations. The tax rate was 0.70 percentage points lower year on year, which also supported net profit, while interest expense rose 51.66%. Management said EBITDA at NHIC and NHIL was negative at Rs 181 Mn in Q4FY26, and CIHL reported negative EBITDA of US$5.1 Mn.
Margin recovered from Q3 but remained below the Q2 peak
Operating margin rose from 21.14% in Q3FY26 to 21.71% in Q4FY26, after reaching 22.47% in Q2FY26. The quarter therefore marked a sequential recovery rather than a fresh peak, while the year-on-year comparison remained favourable against 19.13% in Q4FY25. At 21.71%, the margin was 1.67 percentage points below the 23.38% median for 48 healthcare peers that had reported the same quarter.
Expansion pipeline remains concentrated in Bangalore and Kolkata
Management said the HSR Bangalore greenfield project is planned to add 215 beds at a cost of Rs 4,900 Mn, while the Rajarhat Kolkata project is planned to add 350 beds at Rs 9,000 Mn, with both scheduled for FY28. The company also said Central Bangalore, South Bangalore and Raipur projects are planned to add 220, 350 and 300 beds respectively, with completion targets in FY28 or FY29. Management said the company targets waste-water recycling by 2030.
The market reaction was large relative to Narayana’s history
The stock's recorded reaction was a 4.55% gain on the result day, with a 6.63% gain after 30 days and a 4.67 times volume ratio on day zero. That response was unusual against the past eight result reactions, which were up only twice and down six times, with a median absolute move of 1.93%.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,044 cr | ₹969 cr | +7.77% | +13.60% |
| Other income | ₹127 cr | ₹-29 cr | — | +19.13% |
| Expenses | ₹817 cr | ₹764 cr | +6.99% | +9.98% |
| Operating profit | ₹227 cr | ₹205 cr | +10.68% | +28.93% |
| Operating margin (%) | 21.71% | 21.14% | — | — |
| Interest | ₹39 cr | ₹29 cr | +33.13% | +51.66% |
| Depreciation | ₹51 cr | ₹47 cr | +8.03% | +10.65% |
| Profit before tax | ₹264 cr | ₹99 cr | +166.15% | +25.19% |
| Tax | ₹62 cr | ₹24 cr | +163.86% | +21.54% |
| Net profit | ₹202 cr | ₹76 cr | +166.86% | +26.34% |
| EPS (₹) | ₹9.95 | ₹3.73 | +166.76% | +26.27% |
Operating margin of 21.71% compares with a Healthcare sector median of 23.38% across 48 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +4.55% | +3.23% |
| Next session | +1.93% | — |
| 5 sessions | +4.24% | +5.23% |
| 15 sessions | +0.37% | — |
| 30 sessions | +6.63% | — |
Volume on the results session was 4.67× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q4 FY26 ARPOB was ₹18.6 Mn, compared with ₹16.9 Mn in Q4 FY25.
Guidance & outlook
- The company targets waste-water recycling by 2030.
Expansion
- The HSR Bangalore greenfield project will add 215 beds at a project cost of ₹4,900 Mn, with completion planned for FY28.
- The Rajarhat Kolkata greenfield project will add 350 beds at a project cost of ₹9,000 Mn, with completion planned for FY28.
- The Central Bangalore lease project will add 220 beds at a project cost of ₹1,600 Mn, with completion planned for FY28.
- The South Bangalore greenfield project will add 350 beds at a project cost of ₹8,000 Mn, with completion planned for FY29.
- The Raipur expansion will add 300 beds at a project cost of ₹5,400 Mn, with completion planned for FY28.
Problems & risks
- EBITDA for NHIC and NHIL was negative at ₹181 Mn in Q4 FY26.
- CIHL reported negative EBITDA of US$5.1 Mn in Q4 FY26.
What to watch
- Whether standalone operating margin holds above 21.71% after the Q4FY26 recovery.
- Whether other income remains below its 48.10% share of pre-tax profit.
- Whether the negative EBITDA reported at NHIC and NHIL and CIHL improves from Rs 181 Mn and US$5.1 Mn respectively.