Why Does Macquarie Remain Cautious on Apollo Hospitals Despite Target Hike?
Macquarie’s Hospital Sector View
Macquarie has maintained its Underperform rating on Apollo Hospitals while revising its target price upward to ₹6,230 from ₹5,700. The brokerage believes that downside risks are no longer theoretical, with FY2026 shaping up to be another subdued year for hospital operators.
Large bed capacity additions scheduled before the end of FY27 are expected to exert pressure on utilisation and margins.
While management has acknowledged potential profitability pressure, Macquarie believes that Street estimates, though moderated, still remain optimistic relative to near-term demand trends.
Key Concerns Highlighted
🔹 Subdued demand outlook for FY26.
🔹 Significant bed capacity additions.
🔹 Margin pressure from under-utilisation.
🔹 Earnings risk remains elevated.
Hospital stocks often see valuation resets during capacity expansion phases, even when long-term demand remains intact.
Traders navigating healthcare stocks may prefer a Nifty Future Tip approach to manage sector-specific volatility.
Investor Takeaway
Derivative Pro & Nifty Expert Gulshan Khera, CFP®, believes that hospital stocks tend to underperform during aggressive capacity build-outs due to margin compression. Apollo’s long-term franchise remains strong, but near-term profitability risks warrant caution. More healthcare sector insights are available at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice.
Written by Indian-Share-Tips.com, which is a SEBI Registered Advisory Services
