Dr. Agarwal's Health Care

The boards of Dr. Agarwal's Health Care Ltd. (AHCL) and Dr. Agarwal's Eye Hospital (AEHL) have approved a merger of AEHL into AHCL. AHCL currently holds a 71.9% stake in AEHL, which contributed 23% to the parent's profit after tax in the first quarter. Under the merger terms, AHCL will issue 23 new equity shares for every two AEHL shares held by shareholders. The company also approved a preferential share issue worth ₹70 crore at ₹5,270 per share. Morgan Stanley maintains an 'Overweight' rating with a ₹494 price target, citing the merger's potential for operational streamlining and enhanced shareholder value. The brokerage notes the trailing acquisition EV/EBITDA multiple of 22x represents a 14% discount to the hospital sector average. Despite the positive merger news, both companies' shares declined on Thursday, with AEHL falling 13.5% to ₹4,448 and AHCL dropping 4.6% to ₹438.6.

Dr. Agarwal's Health Care Limited and Dr. Agarwal's Eye Hospital Limited have approved a scheme of amalgamation, subject to regulatory approvals. Under the merger, AHCL will issue 23 equity shares for every 2 AEHL shares held by eligible shareholders. AEHL will be absorbed into AHCL as a going concern. The boards also approved AHCL's acquisition of additional AEHL shares worth ₹70 crores through preferential issue, increasing its stake from 71.90% to 72.67%. The merger aims to achieve operational efficiencies, streamlined functions, unified capital allocation, and simplified governance framework. AHCL reported standalone turnover of ₹1,043.89 crores and net worth of ₹1,933.64 crores as of March 31, 2025, while AEHL reported turnover of ₹397.15 crores and net worth of ₹209.61 crores. The share exchange ratio is based on joint valuation by PWC Business Consulting Services LLP and Bansi S Mehta Valuers LLP. Additionally, the company approved director changes, with Ankur Nand Thadani's appointment as Non-Executive Director and Ved Prakash Kalanoria's cessation as Nominee Director, both effective September 24, 2025.

Dr. Agarwal's Health Care Limited reported total income of INR 501 crores, up 22.3% year-over-year, with revenue from operations at INR 487 crores, up 20.8%. The eye care services provider achieved EBITDA of INR 141 crores, up 28.9%, with margins improving 140 basis points to 28.2%. Profit after tax more than doubled to INR 38 crores, expanding margins by 315 basis points to 7.6%. The company served over 7 lakh patients and performed 78,882 surgeries, up 16% year-over-year. The network expanded with 13 new facilities added, including entry into the Delhi market. High-end cataract surgeries increased to 25.5% of total cataract procedures, while robotic cataract surgeries grew 72% to 1,160 procedures. The company plans to open 42 new facilities in the next three quarters and expects ROCE to increase by 1-1.5% in FY26 from 16% in March 2025.