Fortis, Max Healthcare, and Hospital Stocks Surge After CGHS Procedure Rate Revision | Stock Market Today

Market Performance

The healthcare sector witnessed a notable surge on October 6, with several hospital stocks gaining between 4% and 7%. The movement comes after a key development from the Central Government Health Services (CGHS), which revised rates for nearly 2,000 medical procedures, effective October 13, 2025.

The Nifty Healthcare index also reflected the uptick, rising 0.6%, highlighting investor optimism around hospitals benefiting from the updated procedure rates.

Main News

Hospital stocks such as Fortis, Max Healthcare, Narayana Hrudalaya, Yatharth Hospitals, and Apollo Hospitals led the rally, with Narayana Hrudalaya up 5% and Yatharth Hospitals climbing 4%.

The CGHS revision marks a first major update in 15 years, adjusting reimbursement levels closer to current market rates. The move is expected to ease operational pressures on private hospitals and improve cost recovery for treatments provided to government beneficiaries.

Key Highlights of the CGHS Rate Revision

• Number of procedures revised: ~2,000
• Effective date: October 13, 2025
• Beneficiaries covered: ~4.26 million central government employees, pensioners, and dependents across 80 cities
• Rate adjustments: 5%–30% increase across key therapy areas including cardiology, neurology, oncology, and orthopedics
• New agreements: Hospitals required to sign fresh MoAs with CGHS within 90 days, as current MoAs expire on October 13

This structured revision also considers hospital accreditation, city category, hospital type, and ward entitlement, making reimbursement levels more systematic and fair.

Company Details

Among listed hospitals, those with higher CGHS exposure are likely to benefit most. Fortis, Max Healthcare, Narayana Hrudalaya, and Yatharth Hospitals derive up to 35% of revenue from government patients.

Additionally, Fortis has a strategic development on the ownership front. Malaysia’s IHH Healthcare, already a major stakeholder, received SEBI approval to acquire an additional 26.1% stake in Fortis and its unit Malar. IHH’s total holding in Fortis stands at 31.17% as of June 30.

Financial Implications (Illustrative)

• Procedure rate hikes: Average 25%–30% for key procedures
• Revenue uplift for private hospitals: Approx. 2.5%
• EBITDA growth: Up to 10%
• Sector-wide benefit: Positive earnings impact expected across hospitals with significant government exposure

The rate revision improves cost recovery and reimbursement fairness, encouraging hospitals to continue empanelment under CGHS while benefiting millions of government beneficiaries.

Summary

The CGHS procedure rate revision represents a long-awaited boost for private hospitals in India. Stocks like Fortis, Max Healthcare, Narayana Hrudalaya, and Yatharth Hospitals saw gains up to 7%, reflecting positive market response. With 4.26 million beneficiaries relying on the updated rates, the move strengthens hospital revenues while improving healthcare access for central government employees, pensioners, and their families.