Max Healthcare gains 1.5% upon acquiring Sahara Hospital in Lucknow for Rs 940 crore

11 Dec 2023 , 01:48 PM

In early trading on December 11, shares of Max Healthcare Institute saw a 1.5% increase as investors applauded the company’s entry into the Lucknow area with the Rs 940-crore purchase of Sahara Hospital.

We are thrilled about this acquisition since it fits with our plan to expand into additional Tier I and II cities with a robust ecosystem for healthcare services. The chairman and managing director of Max Healthcare Institute, Abhay Soi, stated, ‘Given our history of successful post-merger integration, we anticipate rapidly improving the operating and financial performance on the strength of medical excellence of our clinicians and continued patronage from our patients.’

Max Health’s stock was up 0.77% Rs 683.25 on the NSE at 13:37 p.m.

With a built-up area of 8.9 lakh square feet and 17 stories, the 550-bed Sahara Hospital in Lucknow provides multidisciplinary care in a range of specialties, including gastroenterology, neurology, surgery, cardiology, pulmonology, and diagnostic services. On the same grounds, there is a nursing college with more than 100 yearly admissions.

Along with industry counterparts Global Health and Apollo Hospitals, the corporation will also enter the expanding Lucknow region with the acquisition. Brokers continue to have positive views about the transaction and believe Max Health is headed in the right direction.

‘With this acquisition, Max Health should be able to establish a presence in Lucknow and the neighbouring areas and have plenty of space to grow at one site. Additionally, the acquisition is appealing due to the potential for growth and profitability gains, according to a note from Motilal Oswal Financial Services.

Excited about Lucknow’s rise to prominence as an Uttar Pradesh healthcare hub, Jefferies projected that the newly opened hospital would generate an average revenue per occupied bed (ARPOB) of Rs 60,000 and an EBITDA margin of more than 30 percent, thanks to strong demand from surrounding areas such as Kanpur, Allahabad, Gorakhpur, and Varanasi.

For feedback and suggestions, write to us at [e-mail]