Max Health And Fortis Over Medanta, Apollo Hospitals — Jefferies Positive On Brownfield Bed Additions

Jefferies expects strong volume driven-growth in 2025 over average revenue per occupied bed/payor mix optimisation growth witnessed in past few years, as most of the industry players start to add new beds.

In its coverage, Max Healthcare has the most aggressive expansion plans with bed capacity expansion of more than 50%, while it is more than 30% for Apollo Hospitals Enterprises Ltd., Fortis Health and Global Health Ltd. (Medanta).

The breakeven timelines, margin profile, occupancy and ramp-up of these beds will be key determinant of both the financial as well as stock price performance over the next few years, the note said.

Hospitals with brownfield expansions are expected to outperform greenfield units in 2025, due to faster breakeven (often within a quarter) and quicker margin accretion. In contrast, greenfield units may face one-three years of operating losses depending on location and size.

Brownfield expansion is the process of redeveloping or expanding existing facilities or infrastructure. Whereas, greenfield development is any kind of development in previously undeveloped plots.

ARPOB growth in fiscal 2026 is likely to moderate to mid-single digits due to new bed additions and potential deterioration in payor mix, as hospitals accommodate lower-tier patients with increased capacity. However, brownfield expansions, with lower incremental costs, are better positioned to offset potential margin pressures, Jefferies said.

Moreover, the growth in foreign medical tourists could be muted in 2025 due to geopolitical challenges across several geographies, the brokerage said. Apollo Hospitals has more sensitivity to medical tourists from Bangladesh, while Delhi NCR-based hospitals have for Middle East and North America.