Earnings call transcript: Narayana Hrudayalaya beats Q2 2026 EPS, shares jump 6.9%

Narayana Hrudayalaya beat second quarter forecasts on earnings and revenue, posting earnings per share of 12.4 against a 11.5 estimate and revenue of 28.41 billion versus 28.39 billion expected. The stock rose 6.91% to $1,839 from $1,720.2 on the earnings beat.

The earnings surprise was 7.83%, significantly larger than the revenue beat of 0.07%. India hospital margins expanded to 26.8%, helped by higher patient volumes, better pricing, and a largely fixed cost base. Inpatient footfall rose 4% year on year and outpatient footfall increased about 12%. Clinical and nursing costs fell 1.8% despite higher volumes. Combined losses in insurance and clinic businesses narrowed to INR 20 crores from INR 33 crores in the prior quarter.

Revenue climbed 9% quarter on quarter to 28.41 billion. Average revenue per occupied bed reached INR 19.5 million, up from INR 17.5 million a year earlier.

Outside India, the U.K. business faced headwinds from NHS contracting delays and slow private patient volume growth. The Cayman Islands insurance arm continued to post losses, though they narrowed. Management said the U.K. business should improve over the coming quarters as NHS contracting resets and private channels develop.

Management did not provide a formal forecast but outlined priorities including adding about 635 beds in FY 2028 in India and working to lower average length of stay to 4.0 to 4.1 days from current 4.3 to 4.5 days over four to six quarters. Vice Chairman Viren Shetty said the company's margin profile reflects long-term operational discipline and its mission to serve price-sensitive patients.

Risks include regulatory pressure from oncology price caps in India, continued U.K. revenue volatility, and execution risk in building out insurance and international operations.

Narayana Hrudayalaya stock moved 6.91% higher to $1,839, placing it near the upper part of its 52-week range. Investors should monitor the company's ability to sustain India hospital margin expansion and whether the U.K. and insurance businesses reach profitability.