Brookfield-backed Nuvama Sees 37% Upside Potential in Healthcare Stock, Investment Analysis Suggests

Park Medi World (PARKHOSP) Initiation Coverage Report

Key Highlights

• Nuvama has initiated coverage with a 'Buy' rating and a target price of ₹280, indicating an upside potential of around 37%.
• The brokerage expects Park Medi World to benefit from India's structural shortage of hospital beds, improving reimbursement dynamics and faster healthcare growth in Tier II markets.

Company Overview

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Park Medi World operates 14 multi-super-specialty hospitals with about 3,250 beds, including roughly 870 ICU beds, across Haryana, Punjab, Delhi, and Rajasthan.

Growth Drivers

• Visible expansion pipeline with bed capacity expected to rise to around 5,260 by FY28E.
• Adding roughly 700 beds since FY23, with plans to add another 660 beds by FY26, followed by further additions in FY27 and FY28.
• Much of the new capacity is expected in Tier II markets such as Uttar Pradesh where organised tertiary healthcare penetration remains low.

Improving Reimbursement Dynamics

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• Improving specialty mix is supporting profitability as the hospital chain focuses more on high-acuity treatments such as cardiology, neurology, and oncology.
• Investments in advanced technologies including robotic surgery and transplant programmes are also improving realisations and operating efficiency.

Financial Performance

• Nuvama expects the company's financial performance to strengthen over FY25–28, supported by operating leverage and lower interest costs following debt repayment from IPO proceeds.
• The brokerage forecasts revenue, EBITDA, and profit after tax to grow at CAGR of about 24%, 20%, and 28% respectively.