Max Healthcare Stock Surges 6% as Citi Maintains 'Buy', Predicting 20% EBITDA CAGR

Max Healthcare Stock Surges 6% as Citi Maintains 'Buy', Predicting 20% EBITDA CAGR​

Max Healthcare Institute shares experienced a significant rally, jumping 6 percent on June 18th and claiming the title of top gainer on the Nifty 50. The surge highlighted the stock's strong underlying business fundamentals despite recent market volatility.

The company was trading at Rs 1,088 in afternoon trading, reflecting a valuation of approximately Rs 1.05 lakh crore. This substantial rally significantly outpaced the broader market sentiment, as the Nifty 50 had registered a modest rise of 0.17 percent during the session.

Citi Bullish on Max Healthcare: Target Price Set at Rs 1,240​

Citi reaffirmed its 'buy' rating on Max Healthcare stock following the recent correction and emphasized the stock's favorable risk-reward profile. The brokerage set a target price of Rs 1,240 per share.

According to Citi, which noted that the stock had declined by around 18 percent over the past year, the valuation corrections have made the stock highly attractive. This current level allows investors to benefit from the company's strong medium-term growth trajectory.

Outlook: 20% EBITDA CAGR Projected Over Next Six Years​

Citi projects robust future performance, expecting Max Healthcare to achieve a 20 percent EBITDA compound annual growth rate (CAGR) between FY26 and FY30. This projected expansion is underpinned by ongoing capacity additions and sustained growth across the company's extensive hospital network.

The brokerage further anticipates revenue growth of around 15 percent in FY27, suggesting that this growth could accelerate further starting in FY28 as new expansion initiatives begin contributing meaningfully to the bottom line.

Financial Performance Amid Mixed Analyst Reactions​

Prior to the rally, Max Healthcare had reported its fiscal fourth quarter results. The company recorded a 3 percent year-on-year increase in net profit, reaching Rs 387 crore for Q4 FY26. Revenue also increased by 10 percent, totaling Rs 2,664 crore.

This revenue growth was primarily driven by an 8 percent rise in occupied bed days compared to the previous year. Bed occupancy across the network remained stable at 75 percent, indicating consistent demand for healthcare services.

Market View: Operational Headwinds and Future Risks​

Despite healthy volume growth, analysts reported that margins were under pressure due to aggressive hiring initiatives and continuous capacity expansion efforts. This led to the stock declining after results initially fell short of analyst estimates.

Analysts at Motilal Oswal Financial Services attributed part of the earnings miss to a higher tax rate, although the brokerage noted that overall operating trends within the company remained broadly stable.

Broader Market Context and Outlook​

At 12:52 pm IST, the Sensex was trading up 152 points, maintaining positive market breadth with over 2,000 stocks advancing on the NSE. Max Healthcare stood out as the best-performing constituent on the Nifty 50 during that trading session.

Citi identified execution delays in expansion projects as a key risk factor that could potentially affect the pace of the projected growth.