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A ~4,500-bed market with structural tailwinds; talent is the swing factor; selectively positive on Medanta, Max and Fortis

* The Noida-Greater Noida region has evolved from a satellite town into a selfsustaining urban and employment hub — 1.3m population growing at 5.4% CAGR; a corporate base spanning IT, BFSI and manufacturing; and a wide Western UP and East Delhi catchment — driving structural demand for advanced healthcare.

* Supply remains scarce: Industry experts peg the entire super-specialty bed pool at just ~4,500 for Noida, Greater Noida and neighboring Western UP, with clear underpenetration in organ transplant, robotic surgery and critical care. The market is far from oversupplied even as multiple corporates expand.

* All three listed operators are scaling up profitably: Max has lifted the Jaypee site’s occupancy from 64% to 72% and monthly revenue to ~INR570m. Fortis runs a mature asset with 22% margin and 15% YoY growth rate. Medanta's greenfield facility is ramping up fast on a strong brand recall, with EBITDA losses set to narrow.

* Each operator has a distinct growth lever — Max (post-acquisition turnaround plus 100-bed brownfield add and CoE build-out), Fortis (mature, space-constrained, scouting a second site), Medanta (volume-led greenfield ramp). Doctor talent availability and rising talent costs remain the key swing factor for profitability.

* We are selectively positive on hospital stocks with a BUY rating on Medanta, Max and Fortis, as we expect the Noida scale-up to drive healthy growth in revenue/EBITDA/PAT over FY26-28.

Noida market highlights Bed occupancy accelerating: Max, Fortis, Medanta scaling up in Noida

* After the acquisition of Jaypee Hospitals, MAXH has scaled up the occupancy from 64% to 72% at its 407-bed hospital in Noida. Revenue has increased from INR360-370m per month to INR570m per month.

* FORH’s Noida hospital is a mature 400-bed facility (22 years old) running at 77- 78% occupancy and making INR30m per bed per year. The YoY growth has been 15% for the past one year.

* After the commencement of a 550-bed hospital in Noida, Medanta has scaled up its revenue to ~INR200-250m by operationalizing 382 beds currently. EBITDA loss is expected to considerably reduce in the near term, driven by higher bed occupancy.

* Industry expert indicated that the total number of superspecialty beds (listed/ unlisted) would be just ~4,500 catering to Noida, Greater Noida and neighboring cities in Western UP.

Valuations and view

We remain selectively positive on the hospital space with BUY on Medanta (TP: INR1,490), MAXH (TP: INR1,260) and FORH (TP: INR1,140).

* With the Noida facility scale-up, we expect MEDANTA to not only deliver healthy growth in earnings over the next 2-3 years but also comfortably fund the ongoing capex through internal accruals and surplus cash available. We expect a CAGR of 11%/24%/31% in revenue/EBITDA/PAT over FY26-28.

* While MAXH’s recent performance has been impacted by industry-level headwinds, it is implementing efforts to add beds (brownfield and greenfield) to support growth prospects and optimizing the performance of existing facilities. We expect a CAGR of 14%/15%/20% in revenue/EBITDA/PAT over FY26-28.

* After improving the operational performance under new promoters (IHH), FORH is well-positioned for brownfield expansion and is enhancing its Agilus brand in the diagnostic business. Overall, weexpectaCAGR of 13%/17%/21% in revenue/EBITDA/PAT over FY26-28.

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