Here are the Brokerage Reviews and Recommendations of Narayana Hrudayalaya IPO
Aditya Birla Money has suggested as follows,
At the higher price band of `250, the stock is valued at ~3.7x of its FY15 consolidated sales of ~ `13.6bn. Given experienced management team with a strong execution track record, reputed brand for clinical excellence, and ability to attract high quality doctors, NHL is well-positioned to capture market opportunities and to benefit from the expected growth in the healthcare services market in India. We recommend “Subscribe” on NHL IPO for long term investors for one of its kind opportunity. However, current valuation leaves little room for short term investors to play for listing gains.
Destinomey Securities Analyst has the following Opinion,
India’s overall bed density currently stands at 7 per 10,000 vs the global median of 27 per 10,000. India’s healthcare industry is expected to grow at a health 14-15% CAGR in next 5 years. There is a structural need to bring down the cost of setting up hospitals and increasing the reach of affordable healthcare. We believe Narayana Healthcare is one of the better plays to participate in the said opportunity. We recommend SUBSCRIBE.
Nirmal Bang Analyst said,
The issue price of Rs 250, discounts EV/EBITDA by 17.5x on FY17E (details provided in the report), which we believe is attractive
Considering that more number of hospitals are shifting to matured category (which has higher margins) leading to improved profitability, we recommend subscribing the issue with medium to long term views.
Angel Broking has the following recommendation,
Hence we have a Neutral view on the IPO from a short term perspective. However, investors with a longer term investment horizon can subscribe to the issue considering that the company’s performance is expected to be more favorable in the longer run as the hospital business entails a longer gestation period and takes time to perform at optimum levels.
SBI Cap Securities has the following Recommendation,
Narayana Hrudayalaya Limited (NHL) is currently available at 40.0x and 40.8x its post issue EV/EBITDA at lower and upper band respectively. The same is available at 6.4x and 6.5x its P/Bv at lower and upper band respectively. Expertise over critical care services of cardiac as well as non cardiac diseases, highly scalable model, achieved economies of scale, efficiency achieved through technology adoption, efficient deployment of capital and strong brand recognition would provide a base for further expansion activities making the business attractive. Also the offer is moderately priced compared to its listed peers. Therefore we recommend the investors to subscribe the issue at cut off price.
IIFL Analysts are of the following Opinion,
Though the company is going to add ~1,100 new beds over the next 12‐48 months, most of the capacity addition is beyond our forecast horizon. We expect operating margin to expand 250bps over FY16‐18E on the back of rise in ARPOB and operating leverage tailwinds. Albeit, at the upper price band of Rs250, we find the stock expensive at ~25x FY17E EV/EBITDA as compared to Apollo’s valuation of ~20x EV/EBIDTA
IndiaNivesh has the following Review
The valuation is comfortable compared to that of Apollo and Fortis, given NH’s unique ‘asset right’ business model which reduces cost of setting up hospital. Also the proportion of revenue from mature hospital is less resulting in lower overall EBITDA margin for NH compared to that of Apollo and Fortis. The EV/bed looks comfortable compared to Apollo and Fortis. Also, servicing patients under CGHS, ESIS and other state government schemes helps in getting resources like land at relatively lower cost, thereby reducing payback period to some extent. We recommend SUBSCRIBE to the issue.
