The “Ovum” acquisition might be good for HCG considering the CAGR in the Neonatal and Maternity market. Some of the data points I could find from Rainbow Hospital DRHP and investor ppts:
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The Neonatal care (NICU) market is proposed to grow at a CAGR of 13% FY20-26.
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Under the NICU market, the market share of Private hospitals is proposed to grow at a CAGR of 15%.
Thoughts on the proposed acquisition:
- It will be a good entry for HCG into Neonatal care, as it can be good revenue in the coming days for the company.
- Listed peers on NICU care are posting healthy margins, the same can be observed here also.
- In coming years we can see many such acquisitions happening in the hospital sector, which can improve the sector’s overall earning capacity.
Disc: Invested, biased.
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