Yatharth Hospital announces second acquisition of the year; stock jumps 4%

Yatharth Hospital & Trauma Care Services, which operates hospitals in Delhi NCR region, has made its second acquisition in the healthcare space in less than a year. The hospital operator, which acquired a Faridabad-based Asian Fidelis Hospital in February this year, has been declared as the successful bidder of a super specialty hospital located in Delhi. Reacting to the news, the stock price surged as much as 4.5% to hit a fresh 52-week high of ₹684.40 on the BSE.

“We would like to inform that company has been declared as the successful bidder of super specialty hospital located in Delhi. The acquisition is under the SARFAESI Act 2002 through e-auction,” Yatharth Hospital said in an exchange filing last evening.

As per the release, the acquired hospital is a well-established hospital based out of Model Town, New Delhi offering all the high super specialty services. The hospital has an expandable capacity of 300 plus beds and caters to a large catchment of residential and institutional client base.

“The hospital will give us a firm presence in the attractive market of Delhi along with strengthening Yatharth’s positioning as a leading super specialty chain of Northern India,” the release highlights.

Yatharth Tyagi, Whole time Director of Yatharth Hospitals, says the entry into Delhi market will further consolidate Yatharth Hospital's position as a leading private healthcare provider in North India, and enhance its capacity to deliver quality healthcare services in the region. “This is in line with our unwavering commitment to growth through strategic expansion, both organic and inorganic modes, showcasing our expertise in developing new healthcare facilities and successfully turning around existing operations,” he says.

The company didn’t reveal the name of the hospital but a source close to the development told Fortune India that it was MD City Hospital, located in North Delhi. The estimated cost of the deal is around ₹160 crore. 

In February this year, Yatharth Hospital acquired Asian Fidelis with a 175-bed capacity for ₹116 crore.

Established in 2008, Yatharth Hospital and Trauma Care started operations with 250 beds in Noida in 2010 and has consistently increased capacity over the years to about 1,605 beds in the June quarter of the current fiscal. Today, the company operates five hospitals; three in Uttar Pradesh (Noida, Greater Noida, and Noida Extension), one each in MP (Jhansi-Orachha) and Haryana (Faridabad). 

In a recent interaction with Fortune India, Tyagi told that the healthcare company was in the process of acquiring one more hospital this year. He had also revealed plans to double the group’s bed capacity to around 3,000 within three years through brownfield expansions and acquisitions. The company is expanding its existing hospitals in Noida Extension and Greater Noida by adding 200 and 250 beds, respectively, through brownfield expansion. “We have recently bought the adjacent land parcels, so we are adding 200 beds and 250 beds, respectively, within our two hospitals,” he had said.

Cheering the acquisition news, shares of Yatharth Hospital climbed 4.4% to hit a high of ₹684.40 on the BSE. The market capitalisation of the healthcare firm climbed to ₹5,860 crore.

Yatharth Hospital, which made its stock market debut in August last year after raising ₹686.55 crore via the IPO route, has seen a strong rally in its share price. The stock has zoomed 129% since its listing, from its issue price of ₹300 to ₹684.40 today. The share price has nearly doubled from its 52-week low of ₹344 touched on October 31, 2023. The smallcap healthcare stock has delivered 84% returns to its shareholders so far in the calendar year 2024, while it rallied over 54% in six months. The counter has added 21% in a month despite correction in the broader market.

For the first quarter that ended June 30, 2024, the hospital chain posted a 60% year-on-year (YoY) jump in net profit to ₹30.4 crore, led by improvement in occupancy and average revenue per occupied bed (ARPOB). Revenues rose 37% YoY to ₹212 crore, while EBITDA climbed 30% to ₹53.7 crore during the quarter under review. Occupancy improved to 61% in Q1 FY25 from 51% the previous year, while ARPOB rose to ₹30,551, up 9% YoY.

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