Shares of Max Healthcare Institute Ltd surged nearly 3% in Monday’s session, trading at Rs 1,101 as of 9:07 AM. The rally comes after India’s first major revamp of the Central Government Health Scheme (CGHS) since 2014 — a development that has put the spotlight on hospital stocks, including Apollo Hospitals, Max Healthcare, Fortis Healthcare, Narayana Health, Global Health, and Yatharth Hospitals.
What triggered the surge
The government’s decision to revise rates for nearly 2,000 medical procedures under the CGHS has lifted sentiment across the healthcare sector. The new structure — effective October 13 — introduces a graded rate system based on factors such as hospital accreditation, city classification, and ward entitlement.
Hospitals accredited by the National Accreditation Board for Hospitals & Healthcare Providers (NABH) will serve as the benchmark, while non-accredited hospitals will receive 15% lower rates. Tier-2 and Tier-3 cities will have 10–20% lower rates than Tier-1 hospitals.
Why it matters
For years, hospitals had flagged that CGHS packages were outdated and failed to reflect medical inflation since 2014, leading many institutions to decline cashless treatments under the scheme. The updated framework addresses these concerns and is expected to improve receivables for hospitals.
A note from DAM Capital estimates that the rate revision could lead to a 25–30% average hike across key medical procedures.
Who benefits the most
Among listed players, Fortis, Max Healthcare, Narayana Health, and Yatharth Hospitals are expected to gain significantly, with Yatharth’s exposure to government schemes estimated at 35%.
For Max Healthcare, which has a 21.8% exposure to CGHS-linked operations, analysts expect a meaningful improvement in cash flows and margins.
The broader market view
The Nifty 50 index opened higher on Monday, supported by gains in banking and IT counters, reflecting strong global cues. The benchmark is now eyeing the 25,017 resistance level, marking a 50% retracement of its recent decline from 25,448 to 24,587.
