Jefferies has increased its price target on Max Healthcare to Rs 1,260, optimistic about the hospital chain’s growth prospects despite temporary setbacks from oncology drug pricing changes, which are expected to diminish by 2026.
Jefferies has lifted its target price on Max Healthcare Institute to Rs 1,260 from Rs 1,230 and kept a “buy” rating, after the hospital chain posted a broadly steady first quarter and investors continued to focus on how quickly the drag from oncology drug changes will ease. The brokerage said growth was led by Indian Pharmacopoeia volumes, but performance was still weighed by the company’s decision earlier this year to stop selling high-value patented chemotherapy medicines to institutional patients after government price caps were introduced.
The pain from that shift is expected to fade by December 2026, Jefferies said, while Citi has also said the impact should ease by the third quarter of fiscal 2027. Both brokerages remain constructive on the stock. Citi held its Rs 1,240 target and pointed to occupied bed days as a key support for growth, while noting that excluding oncology, gross revenue rose 20% year on year and that margins were affected by the cost of ramping up new capacity.
Max Healthcare’s June quarter showed the business still growing despite the oncology setback. Consolidated net profit rose 3% from a year earlier to Rs 357 crore, while revenue and operating Ebitda each increased 15% to Rs 2,835 crore and Rs 704 crore respectively. The Ebitda margin was broadly unchanged at 24.8%. Jefferies said the expansion pipeline remains largely on track, with Max Smart now operational and the Kalinga Hospital acquisition completed, although some bed additions have slipped to fiscal 2030, prompting cuts of 2% to 3% in its Ebitda estimates for fiscal 2027 to 2029. Even so, the brokerage still expects a stronger second half and an 18% Ebitda compound annual growth rate through fiscal 2029.
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