Narayana Hrudayalaya Limited conducted its Q3 FY26 Earnings Conference Call on February 17, 2026, providing a transcript update on February 24, 2026. Management highlighted robust profit growth in the India business, driven by transformation programs and payer mix optimization, achieving 150-200 basis points margin expansion YoY. Discussions also covered the strategic integration of the UK operations (Practice Plus), where profitability remains subdued but is expected to improve via technology rollout, and the outlook for the Cayman insurance business.
Q3 FY26 Performance Review: India Business Strength
The call commenced with a focus on the performance of the India business, which has shown high profit growth for the second consecutive quarter. Management attributed this success to initiatives undertaken over the past few years, resulting in margin expansion of nearly 150-200 basis points year-on-year over the last two quarters. Mr. Venkatesh R. noted that improvements stem from transformation programs and payer mix optimization, leading to higher realizations while maintaining volumes and occupancy, aided by technology infusions like robotic cardiac surgeries.
Regarding future levers, management expressed an ongoing commitment to maintaining these realized margins, though they cautioned against specific short-term guidance. On the associated losses from insurance and clinics, Mr. Ravi Vishwanath stated the segment remains in a building stage, with current focus on customer attraction rather than immediate breakeven targets.
Geographic Strategy and Bangalore Cluster Analysis
The management confirmed the strategy template (focusing on margins and realizations) developed in high-performing clusters like Bangalore will be applied to other regions, including the Eastern cluster. For the Bangalore cluster specifically, strong growth was attributed to higher realizations from high-end procedures, especially robotic cardiac surgery and bone marrow transplants, which command higher ARPP compared to clusters like Kolkata.
Conversely, growth in the Northern cluster was soft due to cognizance of receivable issues with scheme payors and capping on drug reimbursements. Management expects these challenges to be temporary, lasting no more than a quarter or two.
UK (Practice Plus) Acquisition Update
The primary discussion point for the UK operations centered on profitability and integration timeline. While the acquisition is expected to be EPS neutral to slightly positive for the group in the near term, losses were noted for the full year due to one-time deal costs. The core strategy involves implementing the group’s technology platform and operational efficiencies achieved in Cayman.
Regarding the Birmingham unit, which was largely neglected under previous ownership, it is now fully operational. Management hopes to achieve breakeven within about four quarters (one year), noting that the initial focus is monitoring performance rather than immediate scaling. The cost profile in the UK, particularly doctor expenses as a percentage of sales, is higher than ex-UK operations, a situation management plans to address over the mid-to-long term via payor mix improvements.
Cayman Operations and Insurance Business
In Cayman, hospital revenue currently stands at $45 million. Dr. Anesh Shetty noted that the government hospital remains larger in revenue due to exclusive payor class rights, indicating room for growth in the local market.
On the insurance side, despite higher revenue this quarter, losses widened sequentially due to volatility from large claims. Management’s focus is shifting from aggressive book expansion (which is nearly complete) to improving underwriting performance starting from the next quarter.
Group Outlook and Capital Structure
The Group’s five-year vision centers on consolidating presence in core markets (Bangalore and Delhi) and ensuring patients are never more than 25 minutes away from an NH Centre in core geographies. The Net Debt to EBITDA ratio target remains below 2.5.
Regarding capital expenditure, the INR 1000 crore capex plan (closer to INR 3000 crore for the full scope) will be funded through internal accruals and debt. Management confirmed no immediate plans to raise equity capital. Furthermore, there is no immediate plan to scale up international presence further, as capital focus remains on India for the next five years.
Source: BSE
