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The business of hospitals will continue to flourish, the broker revealed 4 names, said – if you want to make money, pick up shares.

New Delhi. It is not at all pleasant to write that the business of hospitals will flourish. Because saying that also means more people will continue to get sick. More elderly people will end up in hospitals and poor lifestyles will make people sicker. In such a case, the work of hospitals will increase and their earnings will also increase. This estimate is made by a leading global brokerage firm. The brokerage has also named 4 hospital chains and declared itself bullish on them. Good profit can be earned by investing money in their shares.

The name of the brokerage firm is HSBC. The firm has given its opinion on four major hospitals in its note. Accordingly, 2025 could be the year of major expansion for hospitals. However, despite revenue growth, EBITDA margins may remain under pressure. It has recommended buying shares of four hospitals. The firm has set a target price of Rs 8,220 on Apollo Hospitals, representing a potential upside of 20 percent from the November 28 closing price. Meanwhile, Krishna Institute of Medical Sciences (KIMS) has a target price of Rs 670, up 16% from yesterday’s close.

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

Why does the brokerage think so?
HSBC has preferred shares of Apollo and KIMS in its report. According to the report, there are strong signs of structural growth in the hospital sector due to the increase in the number of elderly people, rise in lifestyle diseases and expanding scope of health insurance coverage.

The brokerage says that the number of beds will increase significantly, but even then, it cannot be said that there is an excess of supply. Even in the small markets of the cities, the demand for beds will remain and it will be difficult to fulfill it. The brokerage is prioritizing hospitals that are expanding capacity without impacting their margins too much, and are improving their occupancy rate, average revenue per bed (ARPOB).

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

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

Understand the challenges before investing.
EBITDA margin may be affected by increased costs due to installation of new beds, HSBC said. Hospital revenue is expected to grow by 12-24 percent in FY25-27, but EBITDA margin may decline marginally by 0-2 percent.

(Disclaimer: The stock mentioned here is based on the advice of the brokerage houses. If you want to invest in any of them, consult a certified investment advisor first. News 18 of your profit or loss. shall not be liable.)

Tags: investment tips, Money making tips, Stock market, Stock market, Stock tips

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