 "Max, Aster DM, Apollo rally up to 7%; what's driving hospital stocks today?")
Hospital stocks in focus: Shares of the listed companies engaged in hospital business like Max Healthcare Institute, Aster DM Healthcare and Apollo Hospitals Enterprise have rallied up to 7 per cent, hitting their respective new highs on the BSE in Thursday’s intra-day trade on healthy business outlook.
Among the individual stocks, Aster DM Healthcare has surged 7 per cent to ₹638.60, on the back of a 20-fold jump in average trading volumes. A combined 16.06 million equity shares representing 3.2 per cent of total equity of the company have changed hands on the NSE and BSE.
Shares of Apollo Hospitals Enterprise (₹7,599.75) and Max Healthcare Institute (₹1,308.55) were up 2 per cent on the BSE. Besides these three stocks, Global Health, Fortis Healthcare, Fortis Malar Hospitals, Narayana Hrudayalaya and Yatharth Hospital & Trauma Care Services were up in the range of 1 per cent to 3 per cent. In comparison, the BSE Sensex was up 0.18 per cent at 83,562 at 02:07 PM. CATCH STOCK MARKET LATEST UPDATES TODAY LIVE
What’s driving hospital stocks?
According to CRISIL MI&A Research, the Indian healthcare delivery industry is projected to experience major growth, with a compound annual growth rate (CAGR) of 9-11 per cent anticipated between fiscal years 2025 and 2027. This growth trajectory is underpinned by several long term structural factors, including rising healthcare needs due to demographic shifts and increasing chronic disease prevalence.
Additionally, the industry’s strong fundamentals, coupled with improving affordability among the population, are expected to drive demand for healthcare services. Furthermore, the potential impact of initiatives such as the Ayushman Bharat scheme, aimed at providing universal health coverage, is poised to further propel industry growth during this period.
With sustained support from long-term structural factors, renewed emphasis on the Pradhan Mantri Jan Arogya Yojana (PMJAY), and heightened Government focus on the healthcare sector, the healthcare delivery market is projected to expand at a CAGR of approximately 9-11 per cent, reaching ₹8.6 trillion by fiscal 2027, Apollo Hospital said in its annual report.
Given the major mismatch between demand and supply for quality beds, along with the improved financial health of corporate hospitals following the pandemic, players appear well-positioned to achieve profitable growth as they strengthen their presence in core markets and venture into Tier 2+ areas geographies, CareEdge Ratings said. ALSO READ | Nifty Sept rejig: IndiGo, Max Health to replace Hero MotoCorp, IndusInd
CareEdge Ratings forecasts that the corporate hospital chains in its coverage will achieve approximately 10-12 per cent year-on-year sales growth in fiscal 2026, driven by a 5-6 per cent increase in Average Revenue Per Occupied Bed (ARPOB), a 100-200 basis point (bps) improvement in occupancy, and rise in new bed additions.
With significant untapped market opportunities and a shortage of healthcare infrastructure in India, leading Indian companies have immense potential for expansion. Supported by long-term structural growth factors, renewed momentum from PMJAY, and increased government focus on the healthcare sector, the Indian hospital sector is projected to grow at a CAGR of 10-11 per cent over the next 3-5 years.
Key demand drivers include the rise in lifestyle-related diseases, growing medical tourism, increasing incomes, and demographic changes. With limited government capital expenditure and a lack of infrastructure, the private sector is expected to experience accelerated growth in the years to come, CareEdge Ratings said in its March 2025 report.