Narayana Hrudayalaya Ltd

- Capital outlay of approx. INR 394 crores incurred till Sep-23; balance amount to be spent in remaining quarters of FY24. - Full-year CapEx budget around INR 1,000-1,137 crores. - Remaining CapEx (~INR 450-500 crores) expected to be 50% funded by debt, maintaining comfortable net debt-to-EBITDA ratio (0.3 to 0.4). - Focus on brownfield and greenfield expansions primarily in Bangalore Health City and Kolkata: - Brownfield expansions mainly in flagship hospitals (Bangalore, Kolkata). - Land acquisition advanced for Kolkata greenfield project; construction to start next year. - Bangalore Health City construction to begin Q4 FY24. - Plans to add 700+ beds over next 3-4 years. - Investment in upgrading infrastructure: new floors, ICUs, OTs, diagnostics, labs. - CapEx may lead to margin dilution initially, with reasonable ramp-up expected due to existing location familiarity (e.g., new Cayman hospital).

- Q3 is seasonally weak due to festivals (Durga Puja, Diwali, Christmas), so current quarter growth may be muted; patients often postpone elective procedures to Q4. - The company expects to continue growing at a high single-digit rate in revenue without further investments by improving throughput and operational efficiencies. - Capacity expansions via brownfield (Bangalore, Kolkata) and greenfield projects will enable higher growth beyond existing bed capacity in 2-3 years. - Technology investments aimed at faster discharges, improved coordination, and reduced Average Length of Stay (ALOS) help utilize beds more effectively, boosting volumes and revenue. - New hospital revenues have shown decent growth, with improving EBITDA margins, indicating ongoing ramp-up. - NHIC (Narayana Health Integrated Care) is growing healthily but primarily focused on preventative care and may feed referrals to hospitals over time. - Inflationary and government-related headwinds and seasonal factors may moderate near-term growth, but long-term indicators are positive.

- The company expects to continue growing with a high single-digit revenue growth from existing assets without any further investments, mainly by increasing throughput and operational efficiencies. - New investments, including bed additions and capacity expansion (brownfield and greenfield projects in Bangalore and Kolkata), are expected to further boost growth. - EBITDA margins are expected to remain stable or improve due to higher revenues, cost efficiencies, and better realizations. - Q3 is seasonally weaker due to festivals, with some elective cases postponed to Q4. - The tax rate for the current year is expected around 10%, with a return to about 25% effective tax rate in future years. - Capital expenditures ongoing (approx. INR 1,000 crore planned) will support growth; net debt to EBITDA ratio remains comfortable (0.3-0.4). - The company is confident in sustaining growth while focusing on value-based care and maintaining fair pricing.

- The company aimed to spend about INR 1,000 crores in CapEx last year and this year combined. - However, many orders got delayed along with construction work, causing a lag in spending. - The committed CapEx amounts reported are capitalized with an expected lead time of about six months. - Not all planned orders line up exactly in the same period due to these delays. - The CapEx reflected in the Balance Sheet may appear lower than committed due to equipment still in the pipeline or delayed deliveries. - The company follows usual sourcing routes for new hospital expansions, leveraging networks in India and the region. In summary, while the committed CapEx orderbook is significant (around INR 1,000 crores targeted across two years), execution has experienced some delays, and orders currently in progress will be capitalized in the coming months.

- For the remaining capex of approximately INR 450-500 crore this fiscal year, around 50% (~INR 250 crore) may be funded through debt. - Even with this incremental debt, the net debt-to-EBITDA ratio is expected to remain comfortable at 0.3 to 0.4. - The company has maintained a healthy cash flow and a strong liquidity profile with net debt of INR 0.86 billion as of September 2023. - No explicit mention of any immediate or planned equity fundraising was made in the transcript. - The focus appears to be on funding expansion through a mix of debt and internal accruals without significantly leveraging the balance sheet.