Park Medi World shares have declined approximately 15% over the past month, with today's trading session contributing to the downward trend. According to reports from Live Mint, the stock opened lower at ₹242.20 per share on the NSE and touched an intraday low of ₹229.10 per share before closing at ₹236 per share. The stock witnessed some value buying and recovered partially ahead of market close, indicating potential support levels may be holding.
As reported by Live Mint, hospital stocks came under selling pressure on Monday and Tuesday due to the Supreme Court's hearing on the drug price cap. The trigger was a Supreme Court hearing on medicine trade margins that asked why the 16% trade-margin cap on scheduled drugs should not also cover non-scheduled medicines such as many cancer drugs. According to Eqmint, the whole BSE Hospitals Index fell around 5% during this period. However, Avinash Gorakshkar, Founder of Avinash Mentor Research, explained that the hospital stock has fallen due to the external reason and its fundamentals are still intact. The final verdict from the Supreme Court is yet to come, which signals this fall more sentimental than fundamental in nature.
Despite the sector-wide sell-off, Park Medi World is among the least exposed names in the sector to the regulatory changes. As reported by Ahmedabad Mirror, cancer drugs are a rounding error, making up less than 2% of Park's revenue. The company operates a value-for-money model, serving lower-cost patients mostly through government schemes, while hospitals charging premium prices are the ones that would be most affected by any price caps. Brokerages estimate the sector-wide impact at 2-7% of EBITDA before hospitals take any steps to offset it.
According to Live Mint reports, Park Medi World Ltd has announced plans to add 1,500 more beds to its existing capacity of 3,500 beds. This expansion represents significant capital expenditure for the multi-speciality hospital chain. The company is positioned among quality hospital stocks in the segment due to these strong fundamentals and growth prospects, with the latest regulatory concerns potentially creating attractive entry opportunities for investors.
As reported by Live Mint, Sumeet Bagadia, Executive Director at Choice Broking, identified a strong support zone at ₹210 to ₹200 on the downside for existing shareholders. For fresh investors, he recommended waiting for a breakout above ₹260 resistance level. On breaking above this resistance, the stock may target the ₹300 mark. High-risk investors can buy maintaining a stop-loss below ₹200 for targets of ₹260 and ₹300, while low-risk investors are advised to buy only above ₹260 for immediate targets. Recent broker analysis suggests 52-62% upside potential for the stock following the regulatory scare.
