Narayana Hrudayalaya Q4 FY26 Earnings Call: India EBITDA Margin Expands to 25.1%, Plans Rs.3,000 Cr Capex Programme

Narayana Hrudayalaya Ltd held its Q4 FY26 earnings call on May 22, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline margins improve; one-time costs and losses temper the picture

• India business EBITDA margin of 25.1%in Q4 FY2025-2026, up 360 bps from 21.5% in Q4 FY2024-2025, driven by volume growth, payer mix optimisation and higher-configuration bed utilisation at flagship centres.
• UK business EBITDA margin improved to 10%in Q4 FY2025-2026 from 7-8% at the time of acquisition, though management cautioned the comparison is not apples-to-apples due to incomplete cost baselines and transition costs.
• Normalised consolidated EBITDA margin of ~22%in Q4 FY2025-2026 after adjusting for ~200 bps of one-time acquisition-related costs (legal, stamp duty, transition).
• UK entity full-year net loss of GBP 1.9M (~Rs.34 Cr)for FY2025-2026; a Rs.10-12 Cr discrepancy between slides was attributed to a conversion rate catch-up effect (YTD vs quarter-end rates).
• India clinic & insurance losses of ~Rs.66 Crin FY2025-2026; management guided a similar run rate for FY2026-2027 due to ongoing new clinic additions and corporate overheads.Consolidation and demerger of the clinic business into the core should help over time.
• Independent other income of Rs.127 Crin Q4 FY2025-2026, including Rs.94 Cr dividend from KIMS (eliminated at consolidated level).

Leveraged buyout with a 7-year debt payback; steady state still quarters away

• UK acquisition loan of £150Mhas a 7-year tenure, is GBP-denominated and serviced locally — management confirmedno currency risk; free cash flow from UK operations will repay acquisition debt through ~FY2032-2033, with management stating "over the next 7 years."
• UK EBITDA margin of 10% is not yet steady-state; management advised waiting "3-4 quarters of data" before analysing UK cost structure trends, as current numbers include transition costs and IT separation charges.
• Total employee costs as a % of UK revenuedecreased ~200 bps vs the Q3 FY2026 reported percentage, but the Q3 base was non-representative due to a part-quarter handover and cost allocations booked on the higher side.
• Acquisition cost of ~Rs.40 Crbooked in the UK segment in Q4 FY2025-2026 has been reclassified to the 'X UK' segment; management offered to explain reclass items offline.
• UK doctor engagement model currently employed, transitioning to a hybrid structure where doctors submit invoices separately; a Rs.67 Cr increase in the doctor expenses line reflects reclassification between doctor and manpower expenses, making line items non-comparable as management aligns UK reporting with group standards.
• Risks acknowledged by management: cultural differences, integration challenges, and resource diversion; management stated these would be worked through.Cash PAT is adequate to service the loan; reported net negative PAT is due to non-cash amortisation of transition costs.

Bangalore drives quaternary volume; Kolkata and NCR face headwinds

• India EBITDA margin expanded 360 bps YoY to 25.1%in Q4 FY2025-2026; management expressed confidence the gains are sustainable but flaggedheadwinds from crude oil costs and the dollar exchange rate.
• Bangalore cluster ARPU north of Rs.250,000, driven by ~100 robotic cardiac surgeries per month, ~160 percutaneous aortic valve replacement (TAVR) procedures, and high-volume paediatric bone marrow transplants in FY2025-2026.
• Kolkata cluster contribution structurally lowerdue to space constraints at the R.N. Tagore Hospital campus; management flagged the upcoming Rajarhat greenfield project (2028 commissioning timeline) as the vehicle to build integrated quaternary capacity.
• Mumbai hospital achieved breakevenin Q4 FY2025-2026; the adult programme startup is expected to improve profitability further.
• Kolkata and NCR clusters face challenges; management plans clinic investments and digital marketing to drive growth in these regions.
• Headwinds to India margin expansion: high inflation (electricity, minimum wages), one-time legal and stamp duty costs, and new centre losses expected from mid-to-late FY2026-2027.Management noted there is still room for margin expansion in percentage terms, but tempered by these centre start-up losses.

KMN insurance losses persist; clinic network doubles, expands to Kolkata

• KMN insurance annualised premium run rate of $60Min Q4 FY2026, with a loss ratio of ~110-112% and quarterly losses of ~$5M; management guided 1-2 more quarters (Q1-Q2 FY2027) of similar losses before improvement.
• Price increases on 30-35% of KMN insurance accountsin June 2026 (Q1 FY2027) and account pruning are expected to drive margin improvement; management urged analysing KMN (insurance + hospital) on a consolidated basis, as the integrated care model steers hospital growth.
• KMN hospital revenue scaled from <$30M to ~$50M per quarterin Q4 FY2026, but growth is expected to slow andnot sustain double-digit quarter-on-quarter pace; international markets are expected to drive future growth once the KMN opportunity is exhausted (no specific timeline given).
• India insurance business: no break-even date provided; losses from combining controlled claims ratio with admin expenses are expected to reduce over coming years via SME group business growth and automation.
• No UK insurance planned; insurance operations remain only in India and the Cayman Islands. No standalone pharmacy vertical is planned — all pharmacy operations sit within the listed entity's P&L.
• Clinic network at 11 locations in Bengaluru, with plans to double the count; expansion in Kolkata begins in FY2026-2027, balanced against property costs and cash losses. Patient preference is shifting from hospitals to clinics, and the clinic business will be reported within the hospital segment from FY2026-2027.

Rs.3,000 Cr greenfield capex programme through 2028; no FY27 guidance given

• FY2028-2029 CAPEX of ~Rs.1,000 Cr per year(total ~Rs.3,000 Cr) for greenfield projects: Rajarhat, Ajitpur, Raipur and Bengaluru — the 2028 commissioning timeline for these projects remains unchanged.No additional UK CAPEX is planned.
• Higher CAPEX per bed driven by a 60% increasein construction costs post-pandemic and higher land costs in city centres; management is investing in automation and technology to lower operating costs and maintain its low-cost, high-efficiency model.
• Since listing, the company has not added a single bedyet has delivered revenue and margin growth through operational improvements — underscoring the focus on efficiency rather than capacity expansion.
• No specific FY2026-2027 guidance provided; management stated it is starting from the ~22% normalised EBITDA margin base and is committed to improvement.Historical rack rate and price increases for FY2025-2026 were low-to-mid single digits.
• Management expects continued healthy ROCE performance; the company aims to keep pricing the lowest in the market for comparable quality, even with differentiated patient experience in new city-centre facilities.
• NHS (UK) payment termsfor the contracted vendor relationship: bulk payments are received in advance quarterly, while a small percentage is paid after 30-45 days — no financial impact or guidance was discussed in this context.

Atma HIS as a differentiator; startups seen as unproven R&D

• In-house Atma hospital information systemcreates a single source of truth, improving efficiency, enabling disease detection from medical records and supporting research; other hospital groups have expressed interest in a similar system.
• Automation and technology investmentsare being deployed to offset higher upfront CAPEX and maintain the lowest-in-market pricing for comparable quality — the core of the company's competitive positioning.
• Management views new healthcare startupsas bringing "interesting perspectives" and serving as "cost-free R&D" that increases the relative attractiveness of Narayana Hrudayalaya's own model, but considers their sustainability and scalability (standardised pricing, lower capex per bed, payer models) unproven — "that remains, we'll see."
• No plans for white-labelled out-of-patent drugsin retail pharmacies — only internal demand is served; early-stage discussions are underway for unbranded generic antibiotics for inpatient use, butscale is insufficient for branded retail.
• No standalone pharmacy verticalis planned (similar to Apollo Pharmacy); related-party entities such as Samyak Healthcare are 100% subsidiaries of the listed entity, ensuring full economic benefit to shareholders.