Editor’s Take | Investors should include hospital stocks in the portfolio, says Nikunj Dalmia

Описание: Over the weekend, hospital chains came out with their Q2 results, reporting strong growth in net profit and EBITDA margins. This was mainly on the back of faster than expected recovery in non-Covid businesses. For Fortis Healthcare, revenue was up 4% QoQ to Rs 1460 cr, while consolidated EBITDA came in at Rs 280 cr, up 3% QoQ. Max Healthcare’s revenue also rose to Rs 1,434 crore during the second quarter, reflecting a growth of 52% year-on-year and 4% quarter-on-quarter. Meanwhile, Apollo Hospitals reported 34.64% higher total revenues for the Sep-21 quarter on a consolidated basis at Rs 3,717.0 cr.
Analysing this, ET NOW’s managing editor Nikunj Dalmia says “Increasing per capita spend on healthcare, recovery in medical tourism and shift to organised players, is boding well for hospital chains.”
“Non-COVID business is coming back and non-critical surgeries which had been delayed are gaining traction again. Health insurance penetration has also increased immensely and people are opting for large established chains instead of local hospitals,” he explains.
“National chains are getting more business as people are increasing their health insurance cover. With travel restrictions slowly being lifted, medical tourism is also making a comeback. These are all multi-year cycles that are at play. Thus, investors must include hospital stocks in their portfolios. Healthcare allocation does not mean just pharma stocks anymore. Hospital stocks should also be looked at,” he concludes.
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