Narayana Health Plans ₹3,000 Crore Capex to Add 2,000 Beds Over Next 3 Years

26 May 2025 , 10:13 PM

Narayana Health has announced a capital expenditure (capex) plan of ₹3,000 crore over the next three years aimed at expanding capacity by 2,000 beds across India, according to Group CFO Sandhya J. Approximately 20% of the planned investment has already been utilized, primarily towards land acquisitions, with the construction phase for new facilities now set to begin. The company has completed its capex cycle for the Cayman Islands operations, with only minimal maintenance investments required going forward.

Among its hospital units, the Dharamshila facility has achieved break-even and is currently generating stable EBITDA. The Gurugram hospital also reached break-even during the January–March quarter and is expected to post positive EBITDA in FY26.

For FY25, Narayana Health’s capacity addition was restricted to its Cayman unit, reflecting a strategic shift towards improving throughput over adding new beds.

Domestic patient volumes rose over 15% year-on-year in the March quarter, helping to offset a sharp 53% decline in medical tourism from Bangladesh. Occupancy levels across the group’s hospitals remain in the 60–65% range, with management emphasizing enhanced efficiency and higher average revenue per patient (ARPP) over physical expansion.

In Q4 FY25, India operations reported a margin of 21.5%, with further improvement anticipated in FY26. On a consolidated basis, the group-level EBITDA margin stands at 25%, with the Cayman unit expected to maintain stability. The company’s net debt-to-EBITDA ratio is currently at 0.15, and the management aims to maintain it below 2 during the capex cycle, while remaining open to short-term deviations in case of high-value opportunities. Narayana Health reported a strong 18.4% year-on-year growth in revenue for the January–March quarter of FY25, reaching ₹1,475.43 crore compared to ₹1,246 crore in the same period last year.