Hospital stocks have been viewed as “safe” by investors on Dalal Street vis-a-vis generic pharma exporters, as these chains do not face regulatory risks from the US FDA or subject to Trump rhetoric. And with the growing formalisation of healthcare in the country along with the government promoting health insurance through various schemes, hospital chains have been the key beneficiary.
However, a key question for investors in hospital stocks – the high valuations, in terms of PE for these stocks and is justified. For instance, Apollo Hospitals Enterprise trades at a consolidated P/E of 63.5times, according to Screener.in, while Max Healthcare Institute trades at 77 times, and it is 47.2 times for Jupiter Life Line Hospitals.
Hospital chains are aggressively expanding their presence at new locations and more beds along with improved average revenue per patient, and this has fuelled strong investor interest for stocks in this sector.
Q2 FY26: A Tale of Three Hospital Chains
Max Healthcare Institute, the second-largest hospital chain in the country, declared its results on Friday, and its consolidated revenue from operations grew 25.1 % y-o-y to Rs 2,135.5 crore in the September 2025 quarter. Its ARPOB (Average Revenue Per Occupied Bed) per OBD was Rs 77,300 in Q2FY26 was Rs 76,200 a year earlier. OBD refers to occupancy bed days (OBD) which is a hospital management metric.
Max Healthcare Institute had nearly 5,200 beds at the end of Q2FY26 vis-a-vis 5,000 beds a year earlier, with a significant presence in north India. The Mumbai-based chain also highlighted its In-patient volume was 87,629 in Q2 FY26 vis-a-vis 71,534 a year earlier. As a result, its consolidated net profit grew 74.7% y-o-y to Rs 491.3 crore in the September 2025 quarter.
Earlier, Apollo Hospitals, the largest hospital chain in India, reported that its consolidated revenue from operations grew 12.8% y-o-y to Rs 6303.5 crore in the September 2025 quarter. The Chennai-based hospital chain highlighted that it had 8,050 operating beds in Q2FY26 vis-a-vis 7,994 a year earlier. Occupancy was 69 % in the September 2025 quarter vis-a-vis 73% a year earlier, however, the hospital chain saw its average revenue per In-patient rise nearly 8.7% to Rs 1.73 lakh in the quarter under review. Its consolidated net profit also grew 25% y-o-y to Rs 494 crore in the September 2025 quarter.
And Jupiter Life Line Hospitals’ consolidated revenue from operations grew 17.5% y-o-y to Rs 393.6 crore in the September 2025 quarter. Its operational bed capacity was 1,061 at the end of Q2 FY26 vis-a-vis 983 a year earlier. It has also highlighted that while average occupancy rate was 62.2 % in the September 2025 quarter vis-a-vis 68.5 % a year earlier, however, its ARPOB grew 14.6% y-o-y to Rs 66,100 in the first half of FY26.
The race for beds: Aggressive expansion plans
Max Healthcare Institute’s 268-bed brownfield tower at Nanavati-Max, Mumbai, will be commissioned shortly.
And Apollo Hospitals has highlighted that it has soft launched a 42-bed Apollo Athenaa, branded as Asia’s first dedicated cancer center for women in Defense Colony Delhi and a multi-specialty tertiary care hospital, 384-bed Royal Mudhol Apollo Hospitals in Pune.
For Jupiter Life Line Hospitals, the first phase of its hospital at Dombivali, Mumbai with 220 beds is expected to be operationalized in the first quarter of FY27.
The race for expanding number of beds is intense, and over the coming years, the overall sector should see tremendous growth. One will need to see how this impacts overall occupancy levels and ARPOBs.
Market reaction: Near 52-week highs
Apollo Hospitals Enterprise stock price fell 1.4% to Rs 7,384 on Tuesday, and not too far from its 52-week high of Rs 8,099 that was reached on 23 October, 2025.
And the Max Healthcare Institute stock was broadly flat at Rs 1,118 on Tuesday, and not too far from its 52-week high of Rs 1,314.3 that was reached on 4 July 2025.
Meanwhile, Jupiter Life Line Hospitals stock price fell 1.5% to Rs 1,432 and not too far from its 52-week high of Rs 1,759 that was reached on 25 March, 2025.
The efficiency meter: ROE comparison
Apollo Hospitals Enterprise has a ROE of 18.4% during the current financial year, according to Screener.in, while it is 12.7% for Max Healthcare Institute, and 15% for Jupiter Life Line Hospitals.
Outlook for investors
The growth outlook for hospital chains appears rosy with additional beds being added at different locations across the country, and strong higher ARPOBs.
On the other hand, one needs to be watchful of regulation which could limit the ability of hospitals to increase prices of various procedures.
The valuation of hospital stocks is rich, given the high growth expected from hospital chains over the next few quarters.
Disclaimer:
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
Disclosure: The writer and his family do not hold the stocks discussed in this article.
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