Large cap stock to buy now for an upside of 36%; Recommended by Goldman Sachs

Synopsis: Goldman Sachs maintains a Buy on Max Healthcare, citing 36% upside, driven by Bhubaneswar expansion, low competition, strong demand potential, and strategic location selection supporting long-term growth.

This Large-cap Healthcare Stock, engaged in providing healthcare services, including hospital operations, diagnostics, and patient care, operates a network of multi-speciality hospitals across India with advanced medical facilities, in focus after Goldman Sachs gave a Buy target of Rs. 1,300, which has an upside potential of 36.27 percent.

With a market capitalization of Rs. 92,842.56 crore, the shares of Max Healthcare Institute Limited closed at Rs. 954.00 per equity share, down nearly 0.11 percent from its previous day’s close price of Rs. 955.05. 

What is the News?

Goldman Sachs, a prominent brokerage firm, has recommended a “Buy” call on Max Healthcare Institute Limited with a target price of Rs. 1,300 per share, indicating an upside potential of 36.27 percent from its current price of Rs. 954 per share.

Goldman Sachs continues to recommend a “buy” on Max Healthcare Institute. Goldman Sachs believes the company’s plan to enter the Bhubaneswar market is a strong opportunity for growth. The city currently has very limited hospital facilities, with only a few hospitals serving the area where Max plans to operate. This means there is a clear gap in healthcare services, which Max can fill.

Additionally, there is little chance of strong competition nearby in the near future, especially within a 5 km radius of the new hospital. The company is also carefully choosing locations where it can run hospitals efficiently. Overall, this expansion is expected to strengthen Max’s position and support its long-term growth.

Capacity Expansion

Max Healthcare Institute Limited has strong expansion plans to increase its hospital capacity significantly over the coming years. The company aims to add more than 8,900 beds in total, with around 4,600 beds expected to be added in the next 3-4 years. Its current capacity of about 5,267 beds is projected to grow to nearly 10,000 beds by FY29, showing steady and planned growth across multiple locations.

The expansion includes both brownfield and greenfield projects across key cities like Delhi, Lucknow, Mumbai, and Mohali. Bed additions are expected to rise gradually each year, reaching a total of 9,844 beds by FY29. The company has also planned investments of over Rs. 7,000 crore for these projects, supporting long-term growth and increasing its presence in the healthcare sector.

Revenue Mix of 9M FY26

Max Healthcare Institute Limited’s specialty mix shows a well-diversified revenue base led by oncology, which contributes about 25.1% of total revenue. Other key segments include orthopedics (10.9%), cardiac sciences (10.3%), and renal sciences (9.6%). Neurosciences and internal medicine also contribute steadily. Smaller shares come from gastroenterology, pulmonology, and surgeries. Overall, gross in-patient revenue reached Rs. 6,224 crore, growing 19% year-on-year.

Company Overview

Max Healthcare Institute Limited was established in 2000 and is one of India’s largest private healthcare providers, headquartered in New Delhi. It operates a network of hospitals across North India, offering secondary and tertiary care services in fields such as oncology, cardiology, orthopedics, and neurosciences.

Recent Quarter Results

Coming into financial highlights, Max Healthcare Institute Limited’s revenue has increased from Rs. 1,868 crore in Q3 FY25 to Rs. 2,068 crore in Q3 FY26, which has grown by 10.71 percent. The net profit has also grown by 25.94 percent from Rs. 239 crore in Q3 FY25 to Rs. 301 crore in Q3 FY26. Max Healthcare Institute Limited’s revenue and net profit have grown at a CAGR of 46.01 percent and 78.73 percent, respectively, over the last five years.

In terms of return ratios, the company’s ROCE and ROE stand at 14.9 percent and 12.7 percent, respectively. Max Healthcare Institute Limited has an earnings per share (EPS) of Rs. 14.6, and its debt-to-equity ratio is 0.33x.

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