Improving mix will keep the dream growth rally intact for Narayana stock

Return ratios to double over the FY19-22 period

With a jump of 61 per cent, Narayana Hrudayalaya was the best-performing hospital stock last year. 

Given the 6 per cent addition to those gains on Wednesday, the rally seems to have more steam left. Investors have been switching from large generic pharma companies (which have been pegged back by compliance issues) to health care service providers, in search of higher returns.

Further, completion of capital expenditure programme, asset light expansions and improving return ratios have led to the switch. For Narayana, in addition to the strong operating performance over the last five quarters, there are additional triggers. 

The losses at new hospitals