CGHS rate hike: Max Healthcare, Fortis, Narayana, Yatharth to benefit most, say brokers
Max Healthcare Institute fell 1.13 per cent to Rs 1,125.95. Fortis Healthcare fell 0.99 per cent to Rs 1,043.50. Narayana Hrudayalaya Ltd added 1.63 per cent to Rs 1,817.40.
- Oct 7, 2025,
- Updated Oct 7, 2025 9:52 AM IST
The overall in the CGHS rates for nearly 2,000 medical procedures by the Union Health Ministry after nearly a decade is seen benefitting Max Healthcare, Fortis Healthcare, Narayana Hrudayalaya and Yatharth Hospital & Trauma Care Services Ltd the most. Effective 13th October, the new rates will have a multi-tier structure based on accreditation, city tier and ward.
It is a welcome development for the sector, Nuvama said, amidst the bed expansion phase and the ongoing dispute with private insurers.
"While it is applicable to CGHS, other schemes can follow suit. The median price revision is 100 per cent-plus and super-specialty hospitals can charge a 15 per cent premium on base rates. Considering government mix and location, we reckon Max Healthcare, Fortis, Narayana and Yatharth can benefit most, 4–8 per cent on revenue/150–400bp on margins possibly," Nuvama said.
Hospital stocks were trading mixed in Tuesday's trade. Max Healthcare Institute fell 1.13 per cent to Rs 1,125.95. Fortis Healthcare fell 0.99 per cent to Rs 1,043.50. Narayana Hrudayalaya Ltd added 1.63 per cent to Rs 1,817.40. Yatharth Hospital & Trauma Care Services slipped 1.22 per cent to Rs 772. Global Health fell 0.45 per cent to Rs 1,361.20.
Choice Broking said government schemes account for around 10–35 per cent of revenues for its coverage universe, with CGHS contributing 20–35 per cent of government scheme share. It anticipates that other schemes will align with the revised rates in the near future, adding that Delhi-NCR and Mumbai remain the key cities with the highest number of beneficiaries.
"Our recent discussion with the few management indicate that the revised rates could lead to a 0.5–3 per cent increase in revenue, with most of this benefit flowing through to Ebitda and PAT; Ebitda margin is expected to improve by 35–170 basis points. We expect a partial impact in H2FY26 and a full impact from FY27. Should other schemes adopt similar rates, the positive impact on ARPOB and revenue would be even greater," it said.
The brokerage said the rate revision will benefit companies, such as Medanta (Global Health), Max Healthcare, Narayana and Yatharth. Earlier, the strategic focus was on reducing CGHS dependence so as to improve cash flows and safeguard margin, but Choice Broking now expects expect hospitals to change this approach, going forward.
The overall in the CGHS rates for nearly 2,000 medical procedures by the Union Health Ministry after nearly a decade is seen benefitting Max Healthcare, Fortis Healthcare, Narayana Hrudayalaya and Yatharth Hospital & Trauma Care Services Ltd the most. Effective 13th October, the new rates will have a multi-tier structure based on accreditation, city tier and ward.
It is a welcome development for the sector, Nuvama said, amidst the bed expansion phase and the ongoing dispute with private insurers.
"While it is applicable to CGHS, other schemes can follow suit. The median price revision is 100 per cent-plus and super-specialty hospitals can charge a 15 per cent premium on base rates. Considering government mix and location, we reckon Max Healthcare, Fortis, Narayana and Yatharth can benefit most, 4–8 per cent on revenue/150–400bp on margins possibly," Nuvama said.
Hospital stocks were trading mixed in Tuesday's trade. Max Healthcare Institute fell 1.13 per cent to Rs 1,125.95. Fortis Healthcare fell 0.99 per cent to Rs 1,043.50. Narayana Hrudayalaya Ltd added 1.63 per cent to Rs 1,817.40. Yatharth Hospital & Trauma Care Services slipped 1.22 per cent to Rs 772. Global Health fell 0.45 per cent to Rs 1,361.20.
Choice Broking said government schemes account for around 10–35 per cent of revenues for its coverage universe, with CGHS contributing 20–35 per cent of government scheme share. It anticipates that other schemes will align with the revised rates in the near future, adding that Delhi-NCR and Mumbai remain the key cities with the highest number of beneficiaries.
"Our recent discussion with the few management indicate that the revised rates could lead to a 0.5–3 per cent increase in revenue, with most of this benefit flowing through to Ebitda and PAT; Ebitda margin is expected to improve by 35–170 basis points. We expect a partial impact in H2FY26 and a full impact from FY27. Should other schemes adopt similar rates, the positive impact on ARPOB and revenue would be even greater," it said.
The brokerage said the rate revision will benefit companies, such as Medanta (Global Health), Max Healthcare, Narayana and Yatharth. Earlier, the strategic focus was on reducing CGHS dependence so as to improve cash flows and safeguard margin, but Choice Broking now expects expect hospitals to change this approach, going forward.