Where the stock stands

First, the map for investors. Anand Rathi values the hospital and laboratory business on a sum of the parts — 32 and 26 times FY28 estimated EV/EBITDA respectively — to reach a target of Rs 1,220, some 22 percent above the ruling Rs 997. The chart below places that target against the twelve-month trading band.

The quarter: growth intact, oncology the sore spot

Consolidated revenue rose 15 percent to about Rs 2,830 crore and EBITDA a matching 15 percent to Rs 710 crore, led by a 10 percent lift in occupied bed days. The headline understates the underlying vigour: excluding oncology, revenue grew 20 percent. Average revenue per occupied bed advanced 5 percent to Rs 81,900, occupancy stayed firm at 75 percent, and the fast-growing home and diagnostics arms — Max@Home and Max Labs — expanded 32 and 20 percent to Rs 78 crore and Rs 58 crore. The blemish was cancer care: its share of in-patient revenue slid to 22 percent from 26 percent a year earlier, hurt by price caps, the exit of senior clinicians and the discontinuation of select chemotherapy drugs for institutional patients.

The bed-expansion engine

If oncology is the near-term drag, capacity is the long-term story — and the pipeline is unusually busy, marching toward a stated ambition of more than 2,000 additional beds.

A new frontier: medical education

Margins, returns and the cash engine

Profitability held its ground rather than advancing. The EBITDA margin was steady at 24.9 percent, a flat outcome the brokerage attributes to the recent commissioning of new brownfield capacity and the freshly consolidated Kalinga acquisition — both of which carry start-up drag before they season. That is the familiar arithmetic of a hospital in expansion mode: new beds dilute margins until they fill. Even so, the returns profile stayed enviable, with return on capital employed excluding work-in-progress at 29.2 percent, and operating cash conversion remains robust. As the newest towers reach maturity, the brokerage expects margins to firm and the capital base to work harder.

Earnings trajectory and how the Rs 1,220 target is built

Anand Rathi keeps its estimates broadly intact, modelling revenue and EBITDA to compound at 18 percent each over FY26-28, carrying revenue from about Rs 10,065 crore to Rs 13,915 crore and operating profit from Rs 2,638 crore to Rs 3,709 crore. The target is a sum of the parts: the hospital business capitalised at 32 times and the diagnostics arm at 26 times FY28 operating profit.

Risks to weigh