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Hospital Stocks Plunge Amid Drug-Pricing Regulation Fears; Apollo, Max Lead Losses
M
Moneycontrol•01-10-2026, 09:32
Hospital Stocks Plunge Amid Drug-Pricing Regulation Fears; Apollo, Max Lead Losses
- •Hospital stocks extended losses for a second straight session due to investor concerns over potential tighter regulation of medicine mark-ups at private hospitals.
- •The Supreme Court's recent observations on steep medicine mark-ups and the requirement for patients to purchase from in-house pharmacies triggered the sell-off.
- •Major players like Apollo Hospitals, Max Healthcare, Fortis Healthcare, and KIMS saw significant declines, with Apollo falling 2.3% and Max Healthcare 2.2% in early trade.
- •Brokerages like Jefferies and HSBC acknowledge the regulatory overhang but note that the financial impact remains uncertain, depending on the scope of intervention.
- •Jefferies estimates a potential EBITDA impact of 2-5% for hospitals under various price-cap scenarios, maintaining a positive long-term view on the sector.
Key Questions Answered
Hospital stocks remained under pressure as investors evaluated the potential consequences of tighter medicine mark-up regulations at private hospitals, following observations made by the Supreme Court.
The Supreme Court questioned why a 16 percent retailer margin could not apply to all medicines and highlighted steep mark-ups, citing a cancer drug supplied to retailers for Rs 2,700 but sold at an MRP of Rs 27,000.
Jefferies estimated that medicines and consumables make up 15-20 percent of hospital revenue, projecting an EBITDA impact of 2-5 percent under various price-cap scenarios if hospitals cannot pass on the costs.
