Stocks to buy: Choice Broking sees 20% upside in this healthcare stock. Should you buy?

Park Medi World share price: India's healthcare sector has emerged as one of the market's strongest performers, but Choice Institutional Equities believes there is still meaningful upside left in select hospital stocks.

Following a management meeting and facility visit, the brokerage has reiterated its positive stance on Park Medi World Ltd (PARKHOSP), highlighting its aggressive capacity expansion, disciplined capital allocation and scalable cluster-based business model as key drivers of future growth.

Choice has maintained its 'BUY' rating on the stock with a target price of ₹350, implying an expected upside of 20.6% from the current market price of ₹290. The brokerage believes the hospital chain is well positioned to benefit from expanding healthcare demand across North India through new facilities, acquisitions and operational efficiencies, while remaining on track to achieve its long-term goal of 10,000 beds by FY33.

Choice Institutional Equities said, "PARKHOSP continues to expand its footprint across North India while strengthening its existing clusters. The interaction provided valuable insights into the company's expansion strategy across existing and new markets, while the management reiterated its focus on scalable cluster-led growth, disciplined capital allocation, operational efficiency and strengthening its presence in underpenetrated healthcare markets, while maintaining its long-term aspiration of reaching 10,000 beds by FY33."

Park Medi World stock performance

The stock fell around 2% to its day's low of ₹285 per share on BSE. It has hit its 52-week high of ₹305.25 per share earlier this month and its 52-week low of ₹138.15 in December 2025.

It has risen around 5% in 1 month, 37% in 3 months and 92% in 6 months. The stock was listed n December last year and has risen 79% from its issue price of ₹162.

Why is Choice Broking bullish on Park Medi World?

A key pillar of Choice's optimism is the company's rapid expansion strategy. The brokerage highlighted the upcoming 100-bed Park Hospital Platinum facility in Gurugram, which is being built adjacent to the existing 225-bed Palam Vihar hospital with a capital expenditure of around ₹25 crore.

The new hospital is expected to become operational in November 2026 and is aimed at easing capacity constraints at the existing facility, which operated at around 86% occupancy in FY26 and generated nearly ₹25 crore in revenue, indicating strong demand in the Gurugram market.

The brokerage also expects the recently acquired 330-bed Medicity Hospital in Rudrapur, Uttarakhand, purchased for ₹1.77 billion, to become an important growth engine. Operations are expected to commence by next month-end with all 330 beds operational from Day One. Management is targeting ₹1 billion revenue, around 20% EBITDA margin and nearly 12% PAT margin in the first year, improving further in the second year through higher occupancy, rising average revenue per occupied bed (ARPOB) and a richer super-speciality mix.

Highlighting the company's operating strengths, Choice Institutional Equities said, "The cluster-based operating model remains a key differentiator, enabling neighbouring hospitals to share doctors, specialised equipment and operational resources, improving utilisation, recruitment and overall operating efficiency. Total capacity is expected to reach around 5,590 beds by March 2028, supported by ongoing integration of acquired hospitals and expansion of existing facilities, while the management continues to aspire for 10,000 beds by FY33."

The brokerage noted that the company's strategy extends beyond adding beds. It remains focused on acquiring hospitals in underpenetrated, high-growth healthcare markets based on strategic location, healthcare infrastructure gaps, expansion potential and availability of distressed assets at attractive valuations.

Choice's financial projections also point to robust earnings growth. The brokerage expects revenue to grow from ₹16.8 billion in FY26 to ₹39.4 billion by FY29, while EBITDA is projected to rise from ₹4.4 billion to ₹10.4 billion during the same period. PAT is estimated to increase from ₹2.6 billion in FY26 to nearly ₹7 billion in FY29, while EBITDA margins are expected to remain stable at around 26.5% despite the aggressive expansion phase. ROCE is projected to improve to 25.4% by FY29 from 19.5% in FY26.

Reaffirming its confidence in the company's execution capabilities, Choice Institutional Equities concluded, "We continue to value the company at 18x EV/EBITDA on FY28E and hence maintain our 'BUY' rating with a target price of INR 350." The brokerage believes the combination of expanding hospital capacity, disciplined capital allocation, scalable operations and healthy profitability positions Park Medi World for sustained long-term growth.

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.