Brokerage firm Prabhudas Lilladher has retained its 'Buy' rating on Max Healthcare Institute, setting a target price of ₹1,080. The outlook follows Q2 FY27 results showing 20% revenue growth, though the company faces a revenue shift in its oncology segment. Investors are now focused on how the firm manages its ongoing bed capacity expansion and navigates changes in government reimbursement policies.
Prabhudas Lilladher has maintained its positive stance on Max Healthcare Institute, setting a target price of ₹1,080 for the stock. This report follows the hospital chain's recent financial performance, which highlighted both strong growth in core operations and shifts in specific medical segments.
In the second quarter of the 2027 fiscal year, Max Healthcare reported a 20% year-on-year increase in gross revenue, reaching ₹3,219 crore. The company’s operating profit, or EBITDA, also rose by 18% to ₹820 crore, with an operating margin of nearly 26.8%. These figures underscore the company's ability to drive efficiency even as it scales its operations.
Despite the overall growth, the hospital chain is managing a transition in its oncology business. The share of inpatient revenue from oncology fell to 21% from 26% in the same quarter last year. This change is primarily due to the discontinuation of specific high-value chemotherapy drugs for patients covered under the Central Government Health Scheme (CGHS). The shift in treatment protocols means this segment may continue to influence revenue trends in the coming quarters.
To drive future growth, Max Healthcare is focusing on expanding its infrastructure. The company has approved capital spending of ₹415 crore to add 209 brownfield beds across its existing hospitals. These additions are part of a broader strategy to double its bed capacity over the next four to five years. Success in this area will depend on the firm's ability to execute these projects on time and maintain operational quality across new facilities.
Investors are also tracking the potential for pricing revisions in government healthcare schemes, which could impact margins. Furthermore, the company operates in highly competitive regions, particularly the National Capital Region (NCR), where keeping costs in check while maintaining service quality remains a constant challenge. The ability to manage these operational hurdles, alongside the ramp-up of new capacity, will be key factors to watch in the coming quarters.