MOFSL in its latest note said it is selectively positive on hospital stocks with a 'Buy' rating on Global Health Ltd (Medanta), Max Healthcare Institute Ltd and Fortis Healthcare Ltd, as accelerating occupancy rates in Noida is expected to lift growth. MOFSL said there is a clear underpenetration in organ transplant, robotic surgery and critical care in Noida, Greater Noida and neighboring Western UP and the market is far from oversupplied, even as multiple corporates expand. 

With the Noida facility scale-up, MOFSL expects Medanta to not only deliver healthy growth in earnings over the next 2-3 years but also comfortably fund the ongoing capex through internal accruals and surplus cash available. 

"We expect a CAGR of 11 per cent, 24 per cent and 31 per cent in revenue, Ebitda and PAT over FY26-28," MOFSL said.

While Max Healthcare's recent performance has been impacted by industry-level headwinds, it is implementing efforts to add beds to support growth prospects and optimising the performance of existing facilities. MOFSL expects Max Healthcare to report growth of 14 per cent, 15 per cent and 20 per cent in revenue, Ebitda and PAT over FY26-28.

"After improving the operational performance under new promoters (IHH), Fortis Healthcare is well-positioned for brownfield expansion and is enhancing its Agilus brand in the diagnostic business. Overall, we expect a CAGR of 13 per cent/17 per cent/21 per cent in revenue, Ebitda  and PAT over FY26-28," MOFSL said.

The domestic brokerage said the total number of super-specialty beds catering to Noida, Greater Noida and neighboring cities in Western UP would be just 4,500. It suggested a target of Rs 1,490 on Medanta, Rs 1,260 on Max Healthcare and Rs 1,140 on Fortis Healthcare.

MOFSL said Max Healthcare has scaled up the occupancy from 64 per cent to 72 per cent at its 407-bed hospital in Noida, following the acquisition of Jaypee Hospitals. Revenue has increased from Rs 36-37 crore per month to Rs 57 crore per month.

Fortis' Noida hospital is a mature 400-bed facility (22 years old) running at 77-78 per cent occupancy and making Rs 3 crore per bed per year. The YoY growth has been 15 per cent for the past one year, MOFSL said.

"After the commencement of a 550-bed hospital in Noida, Medanta has scaled up its revenue to Rs 20-25 crore by operationalizing 382 beds currently. Ebitda loss is expected to considerably reduce in the near term, driven by higher bed occupancy," it said.