Disclaimer: This article is written by Shrikant Chouhan, head of equity research, Kotak Securities. Views expressed are his own. Readers’ discretion is advised.
Narayana Hrudayalaya
Rating: Add
CMP: ₹1,841
Fair value: ₹2,220
Resistance: ₹1920-1980 ; Support: ₹1800-1750
The India hospitals business remains the key growth engine. Its strong cardiac franchise, improving case mix and increasing contribution from higher-value specialties provide room for sustained improvement in revenue per patient. In FY26, India hospital revenue grew 10 per cent, while Ebitda grew much faster, leading to a meaningful improvement in margins. Higher realisations, better payor mix and disciplined cost management were the key drivers. Cardiac sciences and medicine/GI remain the largest specialty segments, while oncology, renal, neuro and orthopaedics provide further diversification.
The near-to-medium-term growth runway is supported by capacity expansion in core markets, which should reduce execution risk. Narayana plans to add substantial beds across Bengaluru, Kolkata and Raipur, with several projects already progressing. This expansion should allow the company to capture increasing demand while leveraging its established brand and clinical capabilities.
Internationally, Cayman continues to perform well, supported by the ramp-up of Camana Bay and growth in the insurance business. The UK acquisition of PPG adds scale and diversification, although integration and margin improvement remain important monitorables. PPG currently operates at lower margins than the India business, providing scope for improvement through better case mix and a higher contribution from private patients.
We remain positive on Narayana Hrudayalaya, led by strong India hospital fundamentals, improving case/payor mix and a visible bed expansion pipeline. The key risks are higher leverage, insurance losses and execution of the UK acquisition. We retain Add with a Fair Value of ₹2,220, as the India business remains structurally attractive while international operations provide additional upside if margins improve.
Mrs Bectors Food Specialities Ltd
Rating: Buy
CMP: ₹224
Fair value: ₹270
Resistance: ₹240-245; Support: ₹220-215
Commissioning of the Kolkata (West Bengal) plant towards late FY26 began yielding tangible operational benefits. Localized production in Eastern India reduced cross-country freight expenses and shortened distribution turnaround times. Execution of Project IMPACT—an internal cost-rationalization and supply-chain efficiency program launched in Q1—helped offset a ~3 per cent headwind from raw material inflation (palm oil, packaging, and minimum wages. Quick Commerce Boom: Sales via quick-commerce platforms (e.g., Zepto, Blinkit, Instamart) expanded 58 per cent Y-o-Y, acting as a high-margin growth driver in tier-1 metro markets
Focus of the management going forward is distribution expansion of domestic biscuits and branded breads business and premiumization. Bectors management primarily intends to focus on volume-led topline growth. Company is aiming for double-digit volume growth (and pricing growth) led by distribution initiatives. We marginally increase estimates and continue to recommend BUY with a FV of ₹270, implying 38x FY28 PE and 25 per cent discount to Britannia.
