Hospital – Sector Report – Growth drivers intact
Published on 19 Dec 2025
Out of the 10 hospital stocks under our coverage, 6 have outperformed the BSE Healthcare Index and Nifty 50 by 4-40% in the last 1 year, and 8 have outperformed the indices in the last 3 years. Growth in FY22-25 was largely aided by sweating out of existing assets, better case and payor mix resulting in higher ARPOB, and improving operational efficiency. The FY21-24 period saw minimal new bed addition across coverage hospitals. With the hospital sector witnessing continued demand, corporatization, higher elective and complex surgeries, and increasing insurance penetration, preference for large hospital chains is increasing. To meet the rising demand, hospitals companies under our coverage have earmarked large bed addition over the next 4-5 years.
The recent correction in hospital stocks (10-20%) makes risk reward favorable. At CMP, the stocks are trading at 20-25x EV/EBITDA on FY28E. Overall, we see 15-26% EBITDA CAGR over FY25-28E for our coverage universe. Our FY27 and FY28E EBITDA stands cut by 2-4% for APHS, MAXHEALT, KIMS. We have initiated Global Health (MEDANTA) with “BUY” rating and TP of Rs1,375/share. Top picks are MAXHEALT, ASTERDM, FORH and HCG.
