Nuvama sees 37% upside in this healthcare stock. Should you buy?

Healthcare stock Park Medi World (PARKHOSP) is poised to benefit from India’s structural shortage of hospital beds, improving reimbursement dynamics and faster healthcare growth in Tier II markets, Nuvama said while initiating coverage.

With improving balance sheet quality and visible growth drivers, Nuvama has initiated coverage with a ‘Buy’ rating and a target price of ₹280, indicating an upside potential of around 37%.

The company operates 14 multi-super-specialty hospitals with about 3,250 beds, including roughly 870 ICU beds, across Haryana, Punjab, Delhi and Rajasthan.

“With a visible expansion pipeline, bed capacity is seen rising to around 5,260 by FY28E,” said the brokerage.

The brokerage informed that India remains structurally under-bedded, with around 1.5 beds per 1,000 people compared with the World Health Organization’s benchmark of about 3. According to the brokerage, the gap is most pronounced in North India where healthcare infrastructure outside major metros remains limited.

“India is structurally under-bedded with about 1.5 beds per 1,000 persons versus WHO’s benchmark of around 3, with the gap most pronounced in North India,” Nuvama highlighted. “While capacity additions have largely been concentrated in metros and Tier I cities, Tier II and III regions remain underserved,” it stated.

Why the bullish view?

Nuvama pointed out that Park Medi World has already added roughly 700 beds since FY23, taking its capacity to about 3,250 beds by December 2025. The company plans to add another 660 beds by FY26, followed by further additions in FY27 and FY28.

Much of the new capacity is expected in Tier II markets such as Uttar Pradesh where organised tertiary healthcare penetration remains low.

Nuvama pointed out that improving specialty mix is supporting profitability as the hospital chain focuses more on high-acuity treatments such as cardiology, neurology and oncology. Investments in advanced technologies including robotic surgery and transplant programmes are also improving realisations and operating efficiency.

“With greater focus on cardiology, neurology, and oncology, aided by investments in advanced technologies including robotic surgery and transplant programmes, PARKHOSP has seen an improvement in its clinical mix,” Nuvama said, adding that this shift is driving higher ARPOB and operating efficiency.

Nuvama expects the company’s financial performance to strengthen over FY25–28, supported by operating leverage and lower interest costs following debt repayment from IPO proceeds. The brokerage forecasts revenue, EBITDA and profit after tax to grow at CAGR of about 24%, 20% and 28% respectively.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.