Profitability expectations to drive more gains for Max Healthcare

KKR-owned chain deserves higher valuations due to margins, premium locations, say analysts

With a return of 74 per cent, Max Healthcare Institute has been the best performing healthcare stock since the start of the year. While the broader rerating of hospital stocks on the back of rising healthcare needs has helped, incremental gains for the company have come on expectations of improving occupancies, rising average revenues and higher profitability.

Some of the gains for the country’s second largest listed healthcare provider by market capitalisation were reflected in the March quarter performance. The average revenue per operating bed (ARPOB) was up over 5 per cent y-o-y in the quarter aided by an improving