Park Medi World Shares in Focus After Emkay Reiterates ‘Buy’, Raises Target Price to Rs 375 On Strong Q1 Performance
Park Medi World shares are likely to remain in focus after domestic brokerage Emkay Global Financial Services reiterated its ‘Buy’ rating on the hospital operator and raised its 12-month target price to Rs 375 from Rs 350, citing a robust first-quarter performance, improving profitability, and a strong expansion pipeline.
The brokerage highlighted that the company delivered a strong operational performance during the June quarter, with revenue rising 19 percent year-on-year to Rs 4.76 billion, while EBITDA increased 20 percent year-on-year. Profit after tax (PAT) jumped 31 percent to Rs 825 million, supported by improved operating leverage and lower finance costs.
According to Emkay, the hospital chain continues to successfully execute its acquisition-led expansion strategy, with the recently announced acquisition in Zirakpur strengthening its presence in the Punjab Tricity region. The brokerage believes the company’s disciplined focus on profitability and the ramp-up of new hospitals in Panchkula, Rudrapur, and Agra provide confidence in its FY27 growth outlook.
Operationally, average revenue per occupied bed (ARPOB) grew 12 percent year-on-year, aided by revised CGHS reimbursement rates, while inpatient volumes increased 16 percent and outpatient volumes rose 17 percent. Although occupancy declined to 55.6 percent due to significant capacity additions, EBITDA margins improved to 26.5 percent, exceeding Emkay’s expectations despite the drag from newly commissioned hospitals.
The brokerage also noted a meaningful improvement in the company’s case mix, with the CONGO mix rising by 520 basis points year-on-year, which is expected to support higher realizations going forward. Management believes the full impact of CGHS rate revisions will be reflected over the remaining quarters of FY27, further supporting revenue growth.
Looking ahead, Park Medi World plans to add around 2,130 beds across FY27 and FY28, backed by a capital expenditure plan of approximately Rs 7.67 billion. Management has guided for 24 percent revenue growth, 19 percent EBITDA growth, and 39 percent PAT growth in FY27, driven by capacity expansion, higher patient volumes, and improved realizations.
Factoring in the better-than-expected quarterly performance and the Zirakpur acquisition, Emkay has raised its EBITDA estimates for FY28 and FY29 by around 4 percent each. The brokerage expects Park Medi World to deliver a 25 percent revenue CAGR between FY26 and FY29, supported by aggressive bed additions, an improving payer mix, and a net cash balance sheet.
At the current market price of Rs 283, Emkay’s revised target price of Rs 375 implies a potential upside of around 32.5 percent, while maintaining its positive long-term outlook on the stock.
