Other hospital stocks fell, but Park is different. Cancer drugs are less than 2% of its sales, most of its patients come through government schemes, and brokers see the share price rising by up to 37%.

Highlights:

  • Oncology drugs: Less than 2% of revenue.
  • Government schemes: Account for 77% of revenue.
  • EBITDA margin (Q1 FY27): 26.5%.
  • Highest broker target: ₹375, from Emkay with a BUY rating.

Hospital stocks sold off last week after the Supreme Court questioned how much private hospitals mark up cancer drugs. Park Medi World Ltd (NSE: PARKHOSPS), one of India’s largest hospital chains serving lower-cost patients, has set out why its earnings are largely protected. The company says any proposed cap on oncology and chemotherapy drug prices will have a negligible effect on its business, and that competitors charging higher prices are the ones exposed.

On 30 September the Court highlighted a cancer drug supplied to retailers at about ₹2,700 that carried an MRP of ₹27,000. It asked why the 16% trade-margin cap on scheduled drugs is not also applied to non-scheduled drugs. The BSE Hospitals Index fell 5%, and some large-cap chains lost up to 10% over two sessions. Park’s share price has held steady, at ₹272.3 in trade on 6 October.

Why the price cap barely matters

Park’s business is built on large patient volumes at low prices, not on drug margins. Management gives five reasons:

  • A small share of revenue. Oncology and chemotherapy drugs make up less than 2% of revenue.
  • Drugs supplied directly. Some government insurers give patients the drugs from their own dispensaries, and Park charges only to give them. Revenue comes from the tests, scans and other services these patients need.
  • Fixed package rates. For other government insurers, the drug is included in a package price that the insurer sets. A cap on MRP does not change it.
  • Discounts already given. Government insurers require a 30% discount on high-priced cancer drugs. Park already passes this on, so it is in reported numbers.
  • Low cost, high returns. With an ARPOB (average revenue per occupied bed) of about ₹31,000, Park has margins and returns among the best in the industry. Management expects a cap to hurt peers and to benefit Park indirectly.

“Our revenue and margins come from the huge volume of patients we treat at affordable rates.”

Low prices, high profits

Park’s figures back up the company’s case. In Q1 FY27, revenue rose 19% to ₹475.7 crore and EBITDA rose 20% to ₹126.1 crore, with a 26.5% EBITDA margin. ARPOB was ₹30,444, up 12% year on year. That is less than half the ₹68,000–82,000 reported by large metro chains. Super-speciality, tertiary and quaternary care rose to 62% of the business, and revised CGHS rates are still feeding into revenue over the rest of FY27.

Brokerage estimates put the possible hit to sector EBITDA at 2–7% before hospitals take any steps to offset it. Park’s payer mix suggests it would sit at or below the bottom of that range.

More hospitals on the way

Park is growing fast. It runs 3,960 beds across north India, has added 960 beds over the past two quarters, and plans more than 2,100 additional beds by FY28, including dedicated oncology capacity at Ambala. The longer-term goal is more than 10,000 beds by FY33. As new hospitals in Agra, Panchkula and Rudrapur fill up, they should add to growth over the next two years. The balance sheet has net cash.

Brokers say buy

Analysts remain bullish. Emkay kept its BUY rating and a ₹375 target after the sell-off, implying about 37% upside. Choice Institutional Equities rates the stock BUY with a ₹350 target, based on 18x FY28E EV/EBITDA. It forecasts revenue, EBITDA and PAT growing at 35%, 35% and 42% a year from FY26 to FY29. On those estimates, the stock trades at 22x FY28E earnings.

For investors, the conclusion is simple. A drug-price cap that worries the sector touches only a small part of Park Medi World’s business, while volumes, new beds and margins continue to grow.

For information only. This is not investment advice or an offer to buy or sell any security. Market data is as of 6 October 2026. Brokerage views and estimates are those of the firms named.