India's Narayana Health slips; HSBC sets street-low price target on margin pressure
** Shares of Narayana Health NARY.NS fall 4.6% to 1,308 rupees apiece
** Drop after HSBC sets a street-low target price of 1,000 rupees, implying a 27.4% fall over next 12 months, and initiates coverage at "reduce"
** Says the hospital chain operator is in heavy investment phase as it looks to add beds and improve existing facilities, earmarking a capex of 16 billion rupees for the ongoing fiscal year
** Adds it will take at least 2-3 years for NARY to benefit from current initiatives
** Estimates operating profit margin to contract to 19.2% in FY2027 from 23% in FY2024
** The mean rating of nine analysts tracking NARY is "hold"; median PT is 1,380 rupees, 38% above HSBC's target - LSEG data
** NARY up 9% in 2024 so far, underperforming the 38% rise in Nifty healthcare index .NIFHEIN
Reporting by Bharath Rajeswaran in Bengaluru
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