Hospital stocks: Lack of clarity on regulations acting as an overhang

Despite revenues for the top players growing by double digit, led by new hospital additions, realisations have been in low, single digits

Hospital stocks have been trading at their 52-week lows this month on regulatory headwinds and weak March quarter results. The goods and services tax regime, stent and kneecap prices, and regional competition have spiked worries among investors about the near-term prospects of the listed health care providers such as Apollo Hospitals, Fortis Healthcare, Max as well as some of the recent listings, including Narayana Hrudayalaya, Shalby and Aster DM. 

Investors' worries are not unfounded. The March quarter results indicate the pressure on realisations and margins as well as issues which were specific to health care chains. 

Despite revenues for the top players