Healthcare Sector Stocks: Healthcare sector companies are expected to have strong growth during the year 2022. There is a strong recovery in the non-covid business in the healthcare sector. The occupancy level is also increasing. Gradually, the number of international patients is also increasing in India. There is a sharp recovery in base business volume for diagnostic companies, while the measures taken by companies for customs control in the era of Kovid 19 are also going to be sustainable in the long term. Brokerage house ICICI Securities is positive on the outlook for the healthcare sector. However, according to brokerages, regulatory hurdles such as price ceilings in-hospital treatment and diagnostic tests and increasing competition are risk factors.
Key Points for 2022
Occupancy levels in hospitals are expected to remain strong. The number of international patients is increasing again, which was reduced due to some restrictions in the first and second waves of Covid. Volume growth in diagnostics companies is expected to remain strong due to the shift in focus from the unorganized sector to the organized sector. Margins are expected to be better in non-covid businesses due to strong recovery and cost control measures.
What to say about brokerage house
The brokerage house says that there is an improvement in the occupancy level, the revenue coming from international patients is currently less than the pre-covid level, but it will be normal in the year 2022. Even after the higher base, the revenue growth in FY23E is likely to be 14 percent. Cast control will increase the profits of the companies. On the other hand, the focus on the organized sector will benefit big diagnostic companies. The brokerage believes that regulatory hurdles regarding hospitalization expenses and diagnostic test prices are a risk factor.
The brokerage house has given a positive view of the sector. The brokerage house has listed Thyrocare, HCG, and Aster DM as tap picks. The rating of Apollo Hospitals has been changed from Add to HOLD. ADD is rated in Fortis. At the same time, HOLD has been advised in Dr. Lal Pathlabs and Metropolis.
(Disclaimer: The investment advice here is given by the brokerage house. This is not the personal view of Zee Business. Markets are risky, so take expert opinion before investing.)