Stocks To Buy: Goldman Sachs bets on these two hospital cos for up to 28% upside

Brokerage firm Goldman Sachs has initiated coverage on two hospital stocks with bullish views, placing both Max Healthcare and Krishna Institute of Medical Sciences (KIMS) firmly on its radar.

The brokerage began coverage on Max Healthcare with a 'Buy' rating and a price target of ₹1,325, signalling a potential upside of about 20% from current levels.

Goldman cited Max's strong growth trajectory, projecting 23% revenue and 24% EBITDA CAGRs over FY25 to FY28, driven largely by bed expansions.

It also mentioned about the company's industry-leading profitability metrics led by operational efficiencies, along with the strongest balance sheet and free cash flow profile in the sector, giving Max the highest capacity expansion potential among peers.

Goldman Sachs has also initiated coverage on KIMS with a 'Buy' recommendation and a price target of ₹900. The target ascribed implies a potential upside of 28% from current levels.

The brokerage expects the company to deliver industry-leading revenue growth of 30% CAGR over FY25 to FY28, aided by the ramp-up of new hospitals.

While current margins are at 21% versus 26% in FY25, Goldman believes KIMS has the largest margin expansion opportunity within its India hospitals coverage as losses from new units ease.

It added that KIMS is positioned to reach top-quartile return ratios, with return on equity expected at around 25% once operations stabilise.

On Friday, shares of Max Healthcare Institute Ltd. closed 1.49% higher at ₹1,100, while Krishna Institute of Medical Sciences Ltd. ended marginally lower at ₹705.20.