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Are you scouting for sector-based investment? Healthcare is one industry with significant returns in the last five years. The BSE Healthcare index, which comprises pharmaceuticals, biotechnology, healthcare, and medical devices major constituents such as Sun Pharmaceutical, Dr Reddy's Laboratories, Cipla, and Divi's Laboratories, has surged over 60 per cent in the last five years, and 16 per cent in over a year. The healthcare index rose by 27 per cent to its highest level (45806.79) in the last five years from the lower levels in the last year.

Analysts from a domestic brokerage have handpicked a scrip from the basket with nearly 15 per cent upside.

SBI Securities' analysts have a 'buy' stance on Max Healthcare shares due to several reasons like capacity enhancement plans, diverse healthcare products, penetration in metro geographies, financial performance, and valuation.

Here are highlights of what the brokerage said:

The brokerage has recommended buying the Max Healthcare stock with a twelve-month target of Rs 1,256, implying a potential upside of 14.20 per cent in the period.

According to the brokerage, at the closing market price of Rs 1,092, the stock is trading at an FY26E/FY27E EV/EBITDA multiple of 47.0x and 36.6x, respectively.

The company is expected to maintain its growth trajectory, driven by increasing occupancy and the commercialisation of new beds, the brokerage added.

In the third quarter of FY25, the company saw growth in its net profit, revenue, and EBITDA as follows:

Moreover, for the first nine months of FY25, its average revenue earned per operational bed (ARPOB) was around Rs 76,000 which is higher than major hospital firms peers like Medanta, Apollo Hospitals, and Fortis Healthcare.

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