Hospitals may get a rerating, stocks rally

MUMBAI: Hospital stocks such as Fortis Healthcare, Apollo Hospitals and KMC Speciality rallied between 3% and 20% on hope that the hospital sector could get re-rated based on the response to the just-announced IPO by Bengaluru-based Narayana Hrudayalaya, which will hit the primary markets on December 17.

On Thursday, Fortis Healthcare rose 7.38% to close at Rs 174.60, Apollo Hospitals Enterprise gained 2.65% at Rs 1,393.50, Indraprastha Medical up 6.90% at Rs 72.05 and Kovai Medical rose 4.42% to close at Rs 885.00 on BSE.

Narayana Hrudayalaya operates a chain of multispecialty, tertiary and primary healthcare facilities. Compared on a EV/ EBITDA basis for 2017, Fortis Health trades at 15x, Apollo Hospitals at 17x while Narayana Health trades at 12x.