HDFC Securities in a recent note has initiated coverage on healthcare stocks, pointing out promising opportunities in India’s healthcare industry. HDFC Securities has assigned a ‘buy’ rating for Apollo Hospitals and Medplus Health Services, with target prices of Rs 7,030 per share and Rs 850 per share, respectively. As of May 20, share price of Apollo Hospitals was at Rs 5,955, while that of Medplus Health Services ended at Rs 691.60 on the NSE. HDFC Securities’ target price for Apollo Hospitals implies an upside of 18% from current levels and a 23% upside for Medplus Health share price.
The brokerage firm believes that India’s healthcare sector is set for steady growth due to factors like an aging population, increasing cases of lifestyle-related diseases, rising health awareness, technological advancements, and a growing middle class.
Moreover, HDFC Securities has also tagged Max Healthcare Institute, Dr. Lal PathLabs, and Metropolis Healthcare with an ‘add’ rating, setting price targets of ₹900, ₹2,700, and ₹2,010, respectively.
They foresee this growth trend continuing, driven by better occupancy rates in hospitals and consistent growth in average revenue per occupied bed. The firm suggests that the upcoming capital expenditure phase, starting from fiscal year 2025, will fuel growth. However, they note that this time, the focus is on strategic expansion with an asset-light model, which might slightly affect profitability.
