Hospital stocks may see a re-rating as investor confidence on the rise

After a weak performance over the last couple of years, hospitals are posting robust growth due to focus on utilisation and margins

Investor confidence in hospital stocks has been on the rise and this is evident from the 20 per cent gains reported by players such as Apollo Hospitals and Narayana Hrudayalaya since their May lows. Even Fortis Healthcare has been making gains this month as uncertainties over ownership and tight liquidity conditions during FY19 are now behind.
 
While other players in the listed space such as Aster DM and HCG have underperformed the broader market given multiple challenges, the Street expects their fortunes to improve in the coming quarters. The key hurdle for the sector was margin pressures brought on