/** Title: Narayana Health’s FY26: India margins expand, UK integration begins, and a large India capex cycle takes shape Slug: narayana-fy26-update Cover image description: Ultra-realistic corporate finance visual. A clean analyst desk scene with a large monitor showing three side-by-side line charts: consolidated revenue rising sharply from FY25 to FY26, India hospital EBITDA margin trending upward, and a separate small panel showing UK revenue and EBITDA in GBP. Include a subtle hospital silhouette in the background and a second screen with a bed-capacity pipeline timeline from FY26 to FY30. No logos or readable text. Short title: Narayana Health FY26 growth and expansion */

Narayana Health’s FY26: India margins expand, UK integration begins, and a large India capex cycle takes shape

Narayana Health ended FY26 with a sharp step-up in consolidated scale, helped by strong performance in India and the first contribution from the newly acquired U.K. business. Consolidated total operating revenue rose to ₹78,960 million in FY26, up 44.0% year on year. EBITDA came in at ₹17,169 million with a 21.7% margin, while PAT was ₹8,105 million with a 10.3% margin. In Q4 FY26, revenue increased to ₹25,938 million, up 75.8% year on year, and PAT was ₹2,280 million.

The company’s narrative through the investor deck and the earnings call is consistent: it is using technology and operating discipline to increase throughput and mix, while stepping into an investment phase that includes new hospitals in core clusters and the integration of an international platform in the U.K. Management repeatedly avoided giving formal guidance, but provided specific project timelines and described several operational levers that are already visible in India margins.

India: steady top line growth, improving realization, and stronger hospital margins

In India, the presentation reports India operations revenue (excluding ATHMA and Medha, and adjusted for inter-company eliminations) of ₹47,920 million for FY26, up 10.2% year on year. Q4 FY26 India operations revenue was ₹12,494 million, up 12.8% year on year. International revenue within India operations declined for FY26 to ₹2,163 million (down 9.0% year on year), a direction management acknowledged as a conscious de-emphasis on international marketing.

Operational metrics point to a business leaning into higher value procedures while controlling length of stay. For FY26, outpatient ARPP increased to ₹4.9 thousand from ₹4.6 thousand in FY25, while inpatient ARPP rose to ₹155 thousand from ₹142 thousand. Average length of stay reduced to 4.3 days from 4.5 days. In Q4 FY26 specifically, inpatient ARPP increased to ₹164 thousand and outpatient ARPP rose to ₹5.0 thousand.

The standout is profitability. For the India hospitals business (as presented in the profitability snapshot, which excludes Jammu, NHIC, NHIL, ATHMA and Medha), Q4 FY26 EBITDA margin expanded to 25.1% compared with 21.5% in Q4 FY25. For FY26, India hospital EBITDA is shown at ₹10,949 million with a 23.1% margin, compared with ₹8,930 million and a 20.7% margin in FY25.

Management attributed this margin improvement to a combination of higher volumes and complexity, improved realization, and ongoing transformation initiatives. On the call, the CEO highlighted Bengaluru as a quaternary care hub, with high volumes of robotic cardiac surgery and TAVI procedures. The investor deck states the group performed 750+ robotic cardiac surgeries in FY26, and the Narayana Institute of Cardiac Sciences in Bengaluru alone performed 727 in FY26 and 247 in Q4 FY26. The same flagship centre also performed 160 TAVIs in FY26, translating to a 20% year-on-year volume increase.

International: Cayman scale-up continues, insurance remains volatile; UK shows EBITDA but PAT is negative

Cayman Islands continued to report rapid revenue growth. The deck shows Cayman hospital revenue of US$49.6 million in Q4 FY26 and US$178.7 million for FY26, up 12.6% and 27.0% year on year, respectively. Cayman insurance (CIHL) revenue grew sharply to US$14.3 million in Q4 FY26 and US$41.8 million for FY26. However, profitability in insurance is weak. The presentation explicitly states CIHL EBITDA of US$-5.1 million for Q4 FY26 and US$ -8.0 million for FY26.

Management asked investors to view Cayman as an integrated care model rather than disaggregating the hospital and insurance economics. Still, the call offered useful colour. The company said the insurance ramp has been faster than expected, and cited an approximate loss ratio of 110% to 112% for the early book. It also said price increases were scheduled to kick in during June for 30% to 35% of accounts, and that the renewal cycle would enable it to exit accounts that were priced unfavourably. Management indicated the losses could remain elevated for another quarter or two, but expects them to come down as repricing and portfolio actions take effect.

The U.K. acquisition is in the earliest stages of integration and financial normalization. The deck provides U.K. consolidated numbers in GBP from 6 November 2025 (effective date of acquisition). FY26 revenue is reported at £110 million, with EBITDA of £10.7 million and an EBITDA margin of 9.8% after adjusting for new center losses. Q4 FY26 revenue is shown at £68 million with EBITDA margin of 10.5%.

The key issue in the U.K. is below-EBITDA profitability. The deck’s PAT bridge shows that despite hospital PAT being positive, net PAT is negative due to interest on the acquisition loan and amortization of acquisition-related intangible assets. FY26 PAT for the U.K. is shown at £ -1.9 million. On the call, management also noted that early quarters included transition costs and reclassifications, and asked investors not to over-interpret short-term movements until a few more quarters of steady reporting are available.

Expansion pipeline: a multi-year India capex cycle, with near-term execution focus

The company disclosed an expansion plan aimed at strengthening presence in flagship regions and increasing India bed capacity from 5,750 as of 31 March 2026 to 7,600+ by FY30. The disclosed projects are detailed, including type, bed count, cost, and expected completion.

Key projects include: HSR Bengaluru (greenfield, 215 beds, ₹4,900 million, completion FY28), Rajarhat Kolkata (greenfield, 350 beds, ₹9,000 million, FY28), Central Bengaluru (lease, 220 beds, ₹1,600 million, FY28), South Bengaluru (greenfield, 350 beds, ₹8,000 million, FY29), Raipur expansion (300 beds, ₹5,400 million, FY28), and South-West Bengaluru (lease, 100 beds, ₹840 million, FY27).

Capex disclosures show FY26 planned greenfield/inorganic capex of ₹4,240 million, but actual spend of ₹1,089 million. On the call, management attributed the slippage to election-related labour availability and delays in approvals. It reiterated that FY28 commissioning timelines still hold and that spending can accelerate as conditions normalize. In response to a question on phasing, management also confirmed that the plan implies around ₹1,000 crore of capex each in FY28 and FY29.

Digital transformation is another enabling layer for this capex cycle. The deck provides adoption metrics rather than generic statements: the NH patient app crossed 3.8 million installs, consent digitization reached about 85% for general consent in inpatient and daycare admissions, NAMAH nursing platform completed 5 million-plus clinical assessments, and around ₹40 crore-plus monthly payments are processed via kiosks across hospitals.

Financial summary (as disclosed)

Note: The presentation includes rounding differences in certain tables.

What to watch: integrated care economics, UK steady-state reporting, and delivery of the bed pipeline

Three themes stand out from the call.

First, integrated care is moving from an experiment to an operating model. Clinics expanded to 11 points of presence with FY26 transactions of 581 thousand. Management stated clinics have been the main driver of domestic referrals as the group de-emphasized international revenue growth. It also said that from FY27 clinics will be rolled into the hospital business for reporting because resources and doctor time are increasingly shared.

Second, the U.K. is a multi-quarter execution story. Management’s stated levers are a higher mix of private pay and private insurance, and the rollout of the technology platform to reduce operating costs. It was explicit that U.K. profitability will not reach India or Cayman levels because each market has a different profit profile. The near-term risk is less about demand and more about reporting normalization and transition costs, which management said will take a few quarters.

Third, the next leg of growth depends on executing a large India project pipeline on time and on budget. The company disclosed specific costs, bed additions, and timelines. It also acknowledged FY26 capex slippage with a root-cause explanation. Investors will likely track whether commissioning schedules for FY28 and FY29 remain intact and whether new center losses, which management expects from mid to end of FY27, are contained.

Narayana Health’s FY26 disclosures show strong momentum in India margins and a willingness to invest for the next cycle. The documents also make it clear that near-term headline volatility could come from international integration and insurance economics. The coming quarters should offer clearer evidence of whether those moving parts settle into a stable, cash-generating profile while the India capacity build-out progresses.