HDFC Securities Bullish on Healthcare: Recommends ‘Buy’ for Two Stocks (COIN: HDFC)

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  • Domestic brokerage firm HDFC Securities has recently initiated coverage on healthcare stocks, citing growth opportunities in India’s healthcare sector.
  • The firm has given a ‘buy’ rating for Apollo Hospitals and Medplus Health Services, with target prices set at ₹7,030 and ₹850 per share respectively.
  • “The healthcare sector is poised for robust growth, driven by an aging population and technological advancements,” noted an analyst at HDFC Securities.

This article explores HDFC Securities’ recent ratings and projections for India’s healthcare sector, highlighting potential growth and investment opportunities.

Overview of HDFC Securities’ Healthcare Stock Ratings

HDFC Securities has provided a positive outlook on several healthcare stocks, including Apollo Hospitals and Medplus Health Services, recommending them as ‘buy’. Additionally, Max Healthcare Institute, Dr. Lal PathLabs, and Metropolis Healthcare have been rated as ‘add’ with respective price targets of ₹900, ₹2,700, and ₹2,010.

Factors Driving Growth in the Healthcare Sector

The brokerage anticipates continuous expansion in India’s healthcare sector, supported by an aging demographic, a rise in lifestyle-related diseases, increased healthcare awareness, technological advancements, and the growth of the affluent middle class. The sector’s value is expected to reach approximately ₹16.5–17.5 trillion by FY28, growing at an 11–12% CAGR.

Specific Insights on Hospital and Diagnostic Sectors

Post the capex phase aimed at expanding bed capacities, hospital companies are now focusing on improving occupancy and operational efficiencies, which are expected to lead to significant EBITDA margin expansion. The diagnostic sector, meanwhile, is set to normalize growth to 12–13% over FY23–26E, driven by favorable macroeconomic factors and an expansion in wellness and preventive care services.

Challenges and Competitive Landscape

The report highlights significant challenges such as heightened competition from both established hospitals and new digital entrants, which could impact the profitability of conventional healthcare firms. Aggressive discounting tactics by well-funded online competitors are also expected to continue.

Retail Pharmacy Market Outlook

The retail pharmacy market in India is projected to grow at a steady 12% CAGR, reaching ₹3,575 billion by 2027. This growth is anticipated to be driven by an increasing share of the pharmacy business in the overall retail market.

Conclusion

HDFC Securities’ coverage on healthcare stocks provides a comprehensive analysis of the sector’s growth prospects, backed by detailed assessments of individual companies and broader market trends. Investors are advised to consider these insights while making investment decisions in the healthcare sector.

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This HTML content is structured according to your specifications and includes detailed insights into the healthcare sector as covered by HDFC Securities, providing a valuable resource for investors interested in this market.

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