Yatharth Hospital Plans To Acquire One Hospital A Year To Fuel Inorganic Growth

Yatharth Hospital and Trauma Care Services Ltd.’s director, Yatharth Tyagi, has said the company is looking to acquire at least one hospital per year to fuel inorganic growth.

The healthcare company acquired a Faridabad-based hospital in February. Tyagi told NDTV Profit they were hopeful of closing one more deal in FY25.

“The hospitals that we have identified have over 250-300 beds. There is a hospital we are eyeing that has around 400 beds in Delhi-NCR. There is another we have identified with a capacity of over 300 beds in the capital city of a nearby state,” he said, adding talks were in advanced stages.

Yatharth Hospitals expects to grow its topline by 30% over the next four years through acquisition, bed expansion and average revenue per occupied bed (ARPOB).

“Both our hospitals in Noida Extension and Greater Noida should be giving good growth with their occupancies in the next few years. Another key factor we are hoping for in the next few years is the growth in our average revenue per occupied bed (ARPOB),” he said.

The top executive noted that the company is going to double its occupancy in the next three years. This will be done through internal accruals, existing cash flow and, if needed, debt.

“To double our bed capacity, we do not require any external funding for these acquisitions,” Tyagi said.

“First is that there is a strong cashflow already in the books, we have around Rs 180 crore. Plus, we will be generating good internal accruals now that the finance cost has reduced significantly after our IPO when we became debt-free. Third, there is always a room for more debt that we can still take,” he added.

Doubling bed capacity and, hence, growing occupancy will be a key driver in improving the company’s topline, Tyagi explained.

“In the next three to four years, we expect annual growth of 30%. We expect occupancy to reach 75% in two years’ time. This will be the driver for the topline,” he said.

However, Ebitda margins will not increase during this period and will remain in the 26% range, Tyagi highlighted. This is because they might be dragged down by the new acquisitions the company plans to make over the next few years.

Shares of Yatharth Hospital and Trauma Care Services Ltd. slipped over 2.5% to an intraday low of Rs 558.15 apiece on the BSE. Though the stock managed some consolidation during the day, it closed 1.2% in the red at Rs 566 a piece on BSE.