Narayana Health eyes 60-65% occupancy; plans ₹1,600-₹1,700 crore capex

Bengaluru-based hospital chain Narayana Health (formerly called Narayana Hrudayalaya) aims to achieve occupancy level of 60-65%, says Group Chief Financial Officer Sandhya J.

Narayana’s occupancy level in the first quarter, which is typically a subdued one for the healthcare sector, was at 60%.

On August 2, the company reported a 10% year-on-year (YoY) increase in net profit at ₹202 crore for the first quarter that ended June 30, 2024.

The hospital chain has made investments in the robotic programme for the current financial year and continues to strengthen its transplant and orthopaedic programmes, she said. “Therefore we will continue to see an upward trajectory on all the high-end work that we are currently doing.”

For the past two years, Narayana Health has done ₹1,000 crore of capex each.

For FY25, the company has guided between ₹1,600 crore and ₹1,700 crore of capex and expects to be in a similar range for the next few years.

However, the company will not be adding any more beds in the next two to three years.

Currently, Narayana Health is building the capacity as it believes that this is the most effective way for return on capital (RoC), she added.

Therefore, the inflexion point on the capex will only be a few years down the line.

The company is looking at organic growth.

“We looked at inorganic opportunistically but because ours is the model where we want to be cost-effective to our patients as well- therefore, we are not going after assets, which are very high priced,” she said.

If it finds the right cultural fit, right price fit, the company will be interested in those assets, Sandhya added.

The current market capitalisation of the company is ₹24,897 crore. CNBCTV18