Narayana Hrudayalaya Limited’s (NSE: NH) consolidated revenue reached record levels following the strategic acquisition of healthcare operations in the United Kingdom. While operational performance remains strong across India and the Cayman Islands, one-time acquisition costs and labor code adjustments impacted quarterly net profit.
the company reported a 61.2% year-over-year increase in consolidated operating revenue to ₹21,512 million for the third quarter ended December 31, 2025. This growth was primarily driven by the inclusion of newly acquired operations in the United Kingdom, alongside steady performance in domestic and Cayman Islands markets. Despite the revenue surge, reported profit after tax declined by 33.9% year-over-year to ₹1,281 million, reflecting significant one-time expenses related to international expansion and regulatory changes.
Acquisition Update
The defining development of the quarter was the consolidation of Practice Plus Group Hospitals in the United Kingdom, effective November 6, 2025. This acquisition aligns with management’s stated strategy to broaden its international footprint and establish a presence in the UK market. In India, performance was supported by optimized payor mixes and a continued shift toward digital platforms for clinical and administrative operations.
Clinical Momentum
The company reported multiple clinical and digital milestones during the quarter, reflecting continued growth in high-acuity procedures and technology adoption. At the Narayana Institute of Cardiac Sciences in Bangalore, robotic cardiac surgeries increased 35% sequentially, while Transcatheter Aortic Valve Implantations (TAVIs) rose 50% year over year, indicating higher volumes of complex interventions. In addition, the Narayana Multi-specialty Hospital in Ahmedabad completed its first heart transplant in December 2025, marking a key expansion in advanced cardiac capabilities.
Digital engagement also strengthened across the network. The company’s AADI platform now processes approximately 40 million clinical messages per month, and around 70% of appointments are booked through digital channels, highlighting increased patient adoption of online interfaces and ongoing integration of digital tools into clinical operations.
Financial Performance
The consolidated financial results for Q3 FY26 reflect a transition phase due to the UK acquisition:
- Revenue: Consolidated operating revenue rose to ₹21,512 million, up from ₹13,346 million in the previous year. The UK segment contributed ₹4,902 million in its first partial quarter of consolidation.
- EBITDA & Margins: Reported EBITDA stood at ₹3,904 million with a margin of 18.2%, compared to 24.4% in the prior year. On an adjusted basis, excluding one-time acquisition costs of ₹757 million, EBITDA was ₹4,662 million with a 21.7% margin.
- Net Income: Reported profit after tax (PAT) was ₹1,281 million. Adjusted PAT, which excludes acquisition costs and a ₹509 million impact from new labor code provisions, stood at ₹2,548 million, a 31.6% increase over the previous year.
- Balance Sheet: As of December 31, 2025, shareholder equity was ₹42,189 million. Total borrowings reached ₹45,442 million, resulting in a net debt-to-equity ratio of 0.53.
Internation Vs. Domestic Operations
International operations led performance in Q3 FY2026, outpacing domestic growth on the back of strategic expansion and strong overseas momentum. India revenue rose 11.8% year over year to ₹11,796 million but declined 4.5% sequentially. In contrast, international revenue was supported by the first-time consolidation of Practice Plus Group Hospitals following its November acquisition in the United Kingdom, contributing ₹4,902 million, and a 70.0% year-over-year surge in the Cayman Islands to ₹4,991 million. Combined UK and Cayman revenue totaled ₹9,893 million, accounting for roughly 46% of consolidated quarterly revenue and highlighting a sharp shift in geographic mix.
Regional performance drivers diverged, with international growth fueled by inorganic expansion and insurance-linked synergies, while domestic operations relied on optimization initiatives. In India, improved payor mix and digital programs supported hospital EBITDA margins of 22.7% (excluding certain units). The Cayman business delivered record revenue on strong hospital utilization and insurance growth. However, acquisition-related costs weighed on near-term profitability, with consolidated profit after tax declining 33.9% year over year to ₹1,281 million, primarily due to ₹757 million in one-time expenses associated with the UK acquisition.
Investment Thesis: (Bull vs. Bear)
Bull Thesis:
- The company is demonstrating aggressive inorganic growth through its UK acquisition and robust organic growth in the Cayman Islands, where revenue increased 70% year-over-year.
- The digital transformation is improving operational efficiency, and a clear capital allocation plan for 1,400+ new beds by FY30 provides a transparent roadmap for long-term domestic scaling.
Bear Thesis:
- Integration of the UK operations has led to immediate margin compression, with adjusted EBITDA margins falling from 24.4% to 21.7%.
- Significant one-time regulatory and acquisition costs have hindered short-term profitability.
- Net debt-to-equity ratio has increased, reflecting the financial leverage required for international expansion.
Surgical Milestones
A key clinical milestone in robotic cardiac care was achieved at the Narayana Institute of Cardiac Sciences in Bangalore, where 244 robotic cardiac surgeries were performed in Q3 FY2026, representing a 35% quarter-over-quarter increase. The facility also reported continued growth in high-end structural heart procedures, completing 48 Transcatheter Aortic Valve Implantations (TAVIs) during the quarter, up 50% year over year, reflecting rising volumes in complex, technology-led interventions across the network.
Advanced clinical activity expanded across other centers as well. The Narayana Super-specialty Hospital in Howrah performed multiple complex pediatric cardiac interventions, including three Transcatheter Fontan procedures, two Sinus venosus ASD stenting procedures, and two Coronary Cameral Fistula device closures. Additionally, the Narayana Multi-specialty Hospital in Ahmedabad completed its first heart transplant in December 2025, highlighting continued expansion in tertiary and quaternary care capabilities across key geographies.
Business Outlook & Strategy
The company is executing a large-scale capacity expansion, targeting a total bed capacity of over 7,600 by fiscal year 2030, up from the current 6,245 beds. Key projects include new greenfield hospitals in Bangalore (HSR Layout and South Bangalore) and Kolkata (Rajarhat), with completions scheduled between FY27 and FY29. Management’s strategy focuses on strengthening its presence in flagship Indian regions while integrating its international hospital and insurance businesses to ensure steady growth.
Sector & Macro Context
The company operates a network of 55 healthcare facilities across India, the Cayman Islands, and the United Kingdom, with domestic performance closely linked to its payor mix. In India, 45% of hospital operating revenue is generated from walk-in patients, while insured patients contribute 32%, underscoring the importance of self-pay volumes alongside expanding insurance penetration in shaping revenue stability and margins.
The recent expansion into the UK introduces exposure to a new macroeconomic and reimbursement environment, broadening the company’s geographic and regulatory footprint. This diversification reduces reliance on the Indian market and the Cayman Islands while adding a developed-market revenue stream, positioning the group for a more balanced earnings mix over the medium term.