Bengaluru-based private hospital network Narayana Health has long expressed its interest in expanding its footprint beyond domestic borders.Speaking to CNBC-TV18, Sandhya J, Group CFO of the company, stated that the bar for international acquisitions is set exceptionally high due to the robust growth potential within India’s healthcare sector.“As we know, India is not only one of the largest healthcare markets in the world, but also a market with tremendous potential for growth. Therefore, any international target we pursue must offer an advantage over the opportunities available in our home market,” she explained.
This strategic outlook underscores the significant importance of the company’s latest move: the £188.78 million acquisition of the hospital division of UK-based Practice Plus Group (PPG).The deal marks a crucial step for Narayana Health as it looks to diversify its international presence while tapping into a developed healthcare market.Sandhya highlighted the UK’s appeal, stating, “The UK is an attractive market for us because it provides business certainty, transparency, and a clear rule of law. Moreover, the healthcare sector in the UK has seen meaningful success for large operators, making it an ideal market for us to participate in.”
The Practice Plus Group acquisition offers a strategic fit with Narayana’s international growth ambitions. Sandhya noted that the size of Practice Plus was particularly appealing, saying, “It’s neither too large to be unwieldy for us to integrate, nor too small to miss out on the value we can bring.With the current size, we can integrate the business and bring our expertise, particularly in technology, to improve care quality and reduce costs.”The synergies from this acquisition will take shape over time. The company plans to leverage its technological capabilities to enhance the quality of care while reducing operational costs.The overall financial impact will depend on how smoothly Practice Plus integrates into Narayana’s existing operations. The company expects some strain on its margins during the integration phase but remains optimistic that, over time, these pressures will ease, leading to stronger financial performance.As the integration progresses, Narayana Health anticipates margin improvements, though this is expected to take a few years.Narayana Health’s current market capitalisation is ₹36,921 crore. The stock is currently trading at ₹1,811 as of 11:41 am on the NSE and has gained 42% over the last year.For full interview, watch accompanying videoFollow our live blog for more stock market updates
