Sandhya J, Group CFO, Narayana Health
Narayana Health expects cash burn in its integrated healthcare (clinics) business to persist until the segment reaches breakeven.
The company has so far invested about ₹250 crore in the segment, which includes approximately ₹150 crore in operating losses and ₹107 crore in its insurance arm, said Sandhya J, Group CFO, Narayana Health. While each clinic eventually turns profitable, new centres planned beyond Bengaluru will initially incur losses, she told businessline.
Q1 profit and revenue
For the quarter ended June 2025, Narayana Hrudayalaya reported a 2.3 per cent year-on-year decline in profit after tax to ₹196 crore, while consolidated revenue rose 15.4 per cent to ₹1,507.3 crore.
Between India and the Cayman Islands, the integrated care business generated about ₹59 crore in revenue in Q1, with a cash burn of around ₹28.6 crore. “This is what has diluted our overall EBITDA,” Sandhya said. The company’s hospital division in India recorded a 70-basis-point margin expansion over the same quarter last year, while margins in the Cayman hospital business remained stable. However, integrated care operations in both geographies posted losses.
Sandhya expects the cash burn to progressively reduce, but says more investment will be needed to scale integrated care clinics beyond Bengaluru. “While each clinic breaks even over time, new clinics will burn cash, and this will continue for the next couple of years,” she added.
The integrated care vertical also includes Narayana’s health insurance offerings- Aditi, which targets the underprivileged or ‘missing middle,’ and Arya, an end-to-end plan.
Expansion plans
The company currently operates 10 clinics and has 70,000 people enrolled in its subscription plan. Expansion will follow an 80:20 debt-to-equity model, with 80 per cent funded through bank borrowings. The pipeline comprises three greenfield hospitals (two in Bengaluru and one in Kolkata), two leased projects in Bengaluru, and one expansion project in Raipur, all of which are expected to be operational between FY27 and FY29.
Published on August 11, 2025
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