NH - Narayana Hrudayalaya Limited Share Price

In the investor call held on November 3, 2025, Narayana Hrudayalaya Limited management discussed the acquisition of Practice Plus Group Hospitals (PPG) in the UK, emphasizing a positive outlook and key financial indicators for the future. The company's decision to enter the UK market was based on its stable political environment, the role of private healthcare in addressing national needs, and the significant growth potential within the sector.

Management highlighted that the EBITDA for PPG was estimated at GBP 29 million for FY25, reflecting an increase from GBP 20 million pre-IFRS adjustments. They also confirmed a debt-free acquisition model, with no legacy liabilities taken on, ensuring that only regular creditors and lease liabilities were assumed.

Regarding operational expectations, the management projected a target for Return on Capital Employed (ROCE) of 20%-22% by FY29-30 and expressed confidence in leveraging efficiencies and technology to replicate their successful operational model from Cayman Islands in the UK. Management mentioned the goal to gradually increase the percentage of private payor patients from the current 93% NHS mix, aiming to align closer with industry peers like Spire, which operates with a 35% NHS payor mix and maintains an 18% EBITDA margin.

The focus remains on enhancing operational throughput without significant capital expenditure since existing facilities are sufficiently equipped to accommodate growth. Management indicated that a robust, tech-driven operational framework would be key to transitioning their integrated services in the UK market.

Overall, the management team's outlook is optimistic, with strategic steps in place to enhance efficiency, grow market share in the private sector, and achieve meaningful contributions to consolidated earnings.

I cannot extract the specific questions and answers directly from the provided transcript, but I can summarize the key points discussed during the Q&A session of the earnings call held on November 3, 2025, regarding the acquisition of Practice Plus Group Hospitals Limited.

1. Question: What is the focus on increasing the non-NHS patient mix? Answer: We intend to gradually increase the private patient mix. Our strategy includes marketing efforts and operational changes to attract more self-pay and PMI patients, moving from 93% NHS dependence.

2. Question: What are the current EBITDA margins at Practice Plus? Answer: Currently, the EBITDA margin is around 8%. We believe that with operational efficiencies and our technology platform, we can improve this over time to match industry standards.

3. Question: When do you expect the Birmingham center to achieve breakeven? Answer: The Birmingham center is in its pre-commissioning phase. We expect to have a clearer timeline for breakeven in the coming quarters as operations ramp up.

4. Question: Can you elaborate on the interest costs for the acquisition financing? Answer: We expect the interest rate to be around SONIA plus 200 bps. This would translate to a floating interest rate of approximately 6% in current terms.

5. Question: What are your long-term targets for ROCE and margins? Answer: By FY29-30, we aim for a ROCE of 20%-22%. We're confident in achieving this through our operational improvements and leveraging the existing structure of Practice Plus.

These key points give a sense of the strategic direction aimed at improving financial performance post-acquisition while addressing investor concerns during the Q&A session.