Nuvama Initiates Max Healthcare Coverage With 'Buy' Rating— Check Target Price
Max Healthcare is strategically located in high-growth areas, as the company is focused on super-speciality care in metros and top-tier urban clusters.
Nuvama has initiated coverage on Max Healthcare Ltd., highlighting the company doubling bed capacity, leadership in return metrics and strategically located growth hubs.
The brokerage firm has issued a 'Buy' rating on the stock, with a target price of Rs 1,430.
Max Healthcare, one of the largest hospital chains in India by market capitalisation, operates 22 chains in India with a total bed count of 5,500.
Nuvama highlighted that Max Health is on track to double its bed capacity, with the company hoping to achieve the target by the next four to five years.
Max Health's expansion plans are anchored by brownfield projects at existing super-speciality facilities (such as Nanavati, Max Smart Saket, and Max Mohali).
Nuvama believes the doubling of capacity could limit average revenue per occupied bed (ARPOB) risk. The company's ARPOB in Q1FY26 stood at Rs. 78,000, nominally up 1% on a year-on-year basis.
The brokerage firm adds that execution excellence in Max Health, coupled with prudent capital allocation, will further aid the company's growth.
Nuvama's claims are backed by numbers, with Max Healthcare seeing a fairly healthy Return on Capital Employed (RoCE) of 21.4% in Q1FY26. EBITDA margins are best-in-class at 25-27%. Nuvama adds that these numbers justify the stock's valuation.
Moreover, Max Healthcare is strategically located in high-growth areas, as the company is focused on super-speciality care in metros and top-tier urban clusters.
A total of 24 analysts are tracking the company, with 15 having a 'buy' rating. Four have recommended 'hold', while five suggest 'sell', as per data compiled by Bloomberg.
