Avendus Initiates Coverage on Dr Agarwal's Health Care with 'Buy' Rating, Forecasts 18.3% Upside Potential

Avendus Spark Institutional Equities Initiates Coverage on Dr Agarwal's Health Care with 'Buy' Rating

Company Overview

Dr Agarwal's Health Care, one of India's largest eye care hospital chains, has been initiated coverage by Avendus Spark Institutional Equities with a 'buy' rating and a target price of ₹495 per share. This implies an upside potential of 18.35% from the stock's Tuesday closing price of ₹418.25 per share.

Market Analysis

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The Indian eye care services market is expected to grow at a 12-14% CAGR over FY24-28E, driven by the high prevalence of eye disorders and rising demand for surgical correction. Avendus Spark Institutional Equities estimates that the company's strong position in the eye care market, growing network presence, and acquisition strategy will drive its growth.

Financial Projections

The brokerage expects the company to deliver a 21% revenue CAGR over FY26-28E and estimates EBITDA and PAT CAGRs of 22% and 46%, respectively, during the same period.

Asset-Light Model

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The company's asset-light model, with most facilities on leased premises, results in lower capital intensity compared to multi-specialty hospitals.

Technical Outlook

According to Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi, the healthcare stock has been sustaining above its September low of ₹407 and has formed a double bottom on the technical chart. A fresh buy is recommended above ₹430 for investors with a low-risk appetite.

Support and Resistance Levels

The 400 zone appears to be a critical support level, and a decisive breach below this threshold could potentially accelerate selling pressure in the near term. On the upside, a sustained move above ₹465, aligned with the 200-DSMA, would be an important technical trigger, signaling a possible revival of buying interest and a shift in sentiment.