Hospital Stocks: Hospital stocks gain on safe-haven buying

Mumbai: Investors have lapped up shares of hospital operators of late, thanks to their reputation of being safe bets in uncertain times, but money managers and analysts warn that a runaway rally hereon is unlikely with valuations turning pricey. “Given Trump’s tariff tantrum, healthcare is a recession-proof play that investors have bet on, and within healthcare diagnostics, hospitals and domestic generic drug marketeers remain insulated from the global turmoil,” said Aditya Khemka, fund manager, InCred Asset Management. “However, hospitals are the most expensive among the three.”

In past one month, most hospital stocks such as Max Healthcare, Apollo Hospitals, Fortis Healthcare, Healthcare Global and Rainbow Children’s Medicare, among other, have surged 4.3-19.6% while the benchmark Nifty gained 4.1% in the same period.

Investor interest in the sector has shot up of late in anticipation that the business would be insulated from the effects of tariffs and the trade war. “Within the domestic-oriented themes, hospital stocks offer better growth, but after the run-up in the stock prices, the risk-reward ratio may not be favourable anymore,” said Krishna Appala, Fund Manager, Capitalmind.