Mumbai | October 1, 2026
Shares of major hospital companies remained under pressure for a second consecutive session after the Supreme Court raised concerns over steep markups on medicines and medical consumables sold through private hospitals.
Fortis Healthcare, Apollo Hospitals, Max Healthcare and other hospital stocks have seen significant declines as investors assess the possible financial impact of tighter regulation on hospital pharmacy and consumable margins.
Fortis, Apollo Among Stocks Under Pressure
Fortis Healthcare has fallen around 10% over two sessions, while Apollo Hospitals has declined about 9% during the same period. Max Healthcare has lost around 8%, while other hospital operators have also faced selling pressure.
The broader BSE Hospitals Index also dropped sharply, reflecting concerns across the sector.
The sell-off followed the Supreme Court’s questioning of large differences between the procurement prices of medicines and the prices charged to patients.
Supreme Court Questions 10x Cancer Drug Markup
During proceedings, the Supreme Court highlighted an example involving a cancer drug with a price to retailer of about ₹2,700 and an MRP of ₹27,000.
The court also asked the Centre to examine whether a uniform 16% margin could be applied across medicines. It separately questioned the practice of hospitals requiring patients to purchase medicines from their own or designated pharmacies.
The matter is scheduled for another hearing on October 12.
Regulatory Changes Could Affect Hospital Earnings
The market concern extends beyond oncology medicines. Government discussions are also looking at margins on medical devices and consumables, including syringes, IV sets, cardiac catheters, intraocular lenses, pacemakers and heart valves.
The potential impact on hospital profitability will depend on the scope of any eventual pricing rules and how hospitals adjust procedure charges, package pricing and costs.
Jefferies estimates that potential margin controls could reduce hospital EBITDA by roughly 2–5% under certain assumptions. Other brokerages have also highlighted different possible impacts, while noting that hospitals have several revenue streams beyond medicines and consumables.
Brokerages Differ on the Sector Outlook
The sharp correction has also prompted renewed analysis of hospital valuations.
Jefferies has maintained its Buy ratings on six hospital companies, including Fortis Healthcare, Apollo Hospitals, Max Healthcare and Medanta, arguing that strong demand for tertiary healthcare and potential cost or pricing adjustments could help offset some regulatory pressure.
However, brokerages do not share identical assumptions. Nomura, for example, has highlighted uncertainty around earnings and potential valuation pressure if regulatory restrictions become broader.
This leaves the sector’s near-term direction dependent on the eventual regulatory framework and the outcome of further court proceedings.
