Yatharth, Max, Fortis, Apollo rally 5%; why hospital stocks in focus today?

Hospital shares were in demand on Monday amid reports that the health ministry revised rates for nearly 2,000 medical procedures under the Central Government Health Services (CGHS) scheme

Share price movement of hospital stocks

Shares of hospital companies rallied up to 5 per cent on the BSE in Monday’s intra-day trade after the Union health ministry announced revised rates for nearly 2,000 medical procedures under the Central Government Health Services (CGHS) scheme. These rates come into effect from October 13.

Yatharth Hospital & Trauma Care Services, Max Healthcare Institute, Fortis Healthcare, Apollo Hospitals Enterprises, HealthCare Global Enterprises and Krishna Institute of Medical Sciences were up in the range of 2 per cent to 5 per cent on the BSE in intra-day trade. In comparison, the BSE Sensex was up 0.18 per cent at 81,354 at 09:20 AM.   READ STOCK MARKET LATEST UPDATES LIVE

 

Index	Current	Pt.Change	% Change
BSE SENSEX	81,207.17	223.86	0.28
BSE BANKEX	62,741.11	339.53	0.54

What's driving hospital stocks?

According to media reports, the Union health ministry has revised rates for ~2000 medical procedures under the Central Government Health Services (CGHS) and is expected to come into effect from 13 October. 

Under these changes, a multi-dimensional rate structure has been created based on 4 different parameters (earlier the rates were the same across OPD and IPD consultation; cities and wards). Any consultation at NABH or NABL accredited healthcare organisation (HCO) would be treated at a standard base rate; for non-accredited HCOs it will be 15 per cent less than accredited hospitals and for CGHS empanelled super speciality hospitals (with more than 200 beds) it will be 15 per cent higher than the base rate. All the HCOs have to submit their acceptance of these new terms and conditions before October 13 or else they would be required to seek fresh empanelment with the CGHS.

ICICI Securities believe among the listed space, private hospitals like Narayana Hrudayala, Aster DM and Healthcare Global are all multi-speciality hospitals having a portion of their bed capacities in tier I cities and are NABH or NABL accredited. This bracket of hospitals can see price revision of 15 per cent higher than the base rate for CGHS patients and potentially increase the revenue from the government scheme patients, the brokerage firm said in a note. 

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Hospital sector outlook

Hospital networks added around 4,000 beds in FY25, with a further 3,400 beds planned for FY26 -  a 23 per cent capacity increase since FY24. Despite growth, bed density remains low (~1.6 beds per 1,000 population), especially outside metro areas, prompting continued expansion through private investment and PPPs.

India’s medical tourism market strengthened in FY25, with global patient volumes up ~33 per cent in CY23, totalling nearly 2 million. International hospital revenue reached approximately $10 billion, projected to grow to $13 billion by 2026, especially in specialities like orthopaedics, cardiology, and oncology, Shalby said in its FY25 annual report.

Looking ahead to FY26, the Indian hospital sector is positioned for sustained growth, characterised by ongoing capacity addition, digital care models, private investment and international patient flows. Providers combining scale, technology, and patient-centric infrastructure are well placed to benefit from evolving healthcare dynamics, the company said.

Meanwhile, a significant gap in healthcare infrastructure in India’s Tier II and Tier III cities presents a substantial growth opportunity for private healthcare providers. Several large corporate hospital chains have expanded their presence in these cities both through organic growth and acquisitions, while regional and local players are also gaining traction. This shift towards expanding healthcare access in underserved areas is reshaping the country’s healthcare landscape and ensuring that quality care reaches a larger portion of the population, Fortis Healthcare said in its FY25 annual report.

Overall, the Indian healthcare industry has maintained robust growth momentum and is poised for continued expansion, fuelled by strong government support, rising private sector investments, technological advancements, and a steadfast commitment to enhancing healthcare access and affordability for all segments of the population.