Hospital business will continue to flourish, brokerage revealed 4 names, said – if you want to make goods then pick up shares.

New Delhi. It is not at all pleasant to write that the business of hospitals will flourish. Because saying this also means that more people will continue to fall ill. More old people will reach the hospital and bad lifestyle will make people sick. In such a situation, the work of hospitals will increase and their earnings will also increase. This estimate has been made by a leading global brokerage firm. This brokerage has also named the names of 4 hospital chains and has declared itself bullish on them. A good profit can be earned by investing money in their shares.

The name of the brokerage firm is HSBC. This firm has given its opinion on four major hospitals in its note. According to this, 2025 could be a year of major expansion for hospitals. However, despite the increase in revenue, EBITDA margins may remain under pressure. It has given a buying recommendation on the shares of four hospitals. The firm has set the target price of Apollo Hospitals at Rs 8,220, which represents a potential upside of 20 percent from the closing price of November 28. At the same time, the target price of Krishna Institute of Medical Sciences (KIMS) has been fixed at Rs 670, which is 16 percent more than yesterday’s closing.

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Apart from Apollo and KIMS, the target price for Rainbow Children Medicare, and Aster DM Healthcare has been fixed at Rs 1,800 (18% upside from current) and Rs 550 (12% upside from current), respectively.

Why does the brokerage feel this way?
HSBC has given priority to the shares of Apollo and KIMS in its report. According to the report, the hospital sector is showing strong signs of structural growth due to the increase in the number of elderly people, increase in lifestyle diseases and increasing scope of health insurance coverage.

Brokerage says that there will be a huge increase in the number of beds, but despite this it cannot be said that the supply is more than required. Even in small markets of cities, the demand for beds will remain and it will be difficult to fulfill it. The brokerage is giving preference to hospitals that are expanding capacity without much impact on their margins, and are improving their occupancy rates, average revenue per bed (ARPOB).

Nearly 5 thousand beds will be added every year!
HSBC has a positive view for Apollo 24/7 (Apollo’s digital health platform). Even if quick-commerce companies move into online pharmacy, it will not have a major impact on Apollo, as it is already providing medicines online.

The brokerage firm has said in its note that the 7 major hospitals covered by them will add 16,000 new beds in the next 3-5 years. This number is four times more than the 4,000 beds added in FY19-24. Also, including other private hospitals, this figure is estimated to reach 24,000.

Understand the challenges before investing money
HSBC has said that the increased cost due to installation of new beds may impact the EBITDA margin. Hospital revenue is expected to grow by 12-24 per cent in FY25-27, but there may be a slight decline of 0-2 per cent in EBITDA margin.

(Disclaimer: The stocks mentioned here are based on the advice of brokerage houses. If you want to invest money in any of these, then first consult a certified investment advisor. AyraNews24x7 will not be responsible for any profit or loss of yours. .)

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