With this acquisition, Max Health will even make an entry within the quick rising Lucknow market, following the footsteps of trade friends Global Health and Apollo Hospitals.

Shares of Max Healthcare Institute gained 1.5 p.c within the opening commerce on December 11 as traders cheered the corporate’s foray into the Lucknow area by way of the acquisition of Sahara Hospital in a Rs 940-crore deal.

“We are enthusiastic about this acquisition, which is consistent with our technique to enter new Tier I / II cities which have a developed healthcare providers ecosystem. Given our observe report of profitable post-merger integration, we anticipate to rapidly enhance the working and monetary efficiency on the energy of medical excellence of our clinicians and continued patronage from our sufferers,” mentioned Abhay Soi, chairman and managing director of Max Healthcare Institute.

At 9.33am, shares of Max Health have been buying and selling 0.5 p.c larger at Rs 681.25 on the NSE.

The 550-bed Sahara Hospital in Lucknow is housed in a 17-storey constructing with a built-up space of 8.9 lakh sq ft and affords multi-disciplinary care in numerous specialties like gastroenterology, neurology, surgical procedure, cardiology, pulmonology and diagnostic services. It additionally has a nursing faculty on the identical premises with an annual consumption of over 100 college students.

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Through the acquisition, the corporate will even make an entry into the rising Lucknow area, following the footsteps of trade friends Global Health and Apollo Hospitals. Brokerages additionally stay constructive on the acquisition and see it as a step in the best course for Max Health.

“This acquisition should help Max Health gain a foothold in Lucknow and surrounding districts, and give ample land availability to expand at a single location. Further, the scope of growth and profitability improvements makes the acquisition attractive,” Motilal Oswal Financial Services said in a word.

Bullish on the emergence of Lucknow as a healthcare hub in Uttar Pradesh with robust demand from catchment areas like Kanpur, Allahabad, Gorakhpur and Varanasi, Jefferies estimated a median income per occupied mattress (ARPOB) of Rs 60,000 and an EBITDA margin of over 30 p.c for the newly occupied hospital.

Kotak Institutional Equities additionally believes that the acquisition will increase Max Health’s means to drive larger throughput with case combine enchancment and additional the scope for mattress growth and truthful valuations given the enticing Lucknow market.

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