Indian Corporate Healthcare Sector Set for 15% Growth in FY26: Report

Synopsis

The Indian corporate healthcare sector is on track for a 15% growth in sales for FY25-FY26, driven by revenue per occupied bed and new bed additions. India Ratings maintains a neutral outlook, citing strong demand and profitability improvements.

Key Takeaways

Projected 15% growth in corporate healthcare sales FY25-FY26.
Growth driven by ARPOB and new bed additions.
Neutral outlook maintained by Ind-Ra.
Expected 20.9% EBITDA margin in FY26.
Pharmaceuticals sector projected to grow 9-10% YoY.

Mumbai, Feb 6 (NationPress) The Indian corporate healthcare sector is projected to achieve approximately 15 percent growth (year-on-year) in sales during FY25-FY26, largely driven by enhancements in average revenue per occupied bed (ARPOB) and the addition of new beds, as noted in a report released on Thursday.

India Ratings and Research (Ind-Ra) has kept a neutral outlook for the corporate healthcare sector for FY26, bolstered by persistently strong demand, ongoing profitability improvements, and carefully planned capacity expansions. This combination is expected to lead to a strong liquidity position, aiding in the enhancement of the credit profile.

Ind-Ra anticipates its monitored companies to achieve around 15 percent YoY growth in sales during FY25-FY26, driven by a 5-6 percent uptick in ARPOB, a 100-200 basis point enhancement in occupancy rates, and a 6-8 percent rise in new bed additions.

Indian hospitals possess considerable growth prospects in the near to medium term, propelled by advancements in healthcare infrastructure aimed at meeting global standards, as highlighted in the report.

Vivek Jain, Director of Corporate Ratings at India Ratings and Research, mentioned that the acquisition of smaller hospitals not only enhances the financial status of larger entities but also improves economies of scale while providing growth opportunities for expansive healthcare chains.

Ind-Ra forecasts EBITDA margins to reach 20.9 percent in FY26 (projected for FY25: 20.0 percent), despite capacity expansions by companies and associated higher overhead costs from new facilities.

The agency maintains a stable rating outlook for FY26, predicting that the net leverage ratio will remain steady in FY26, fueled by robust operating profits, despite the potential for additional debt to finance expansions and significant capital expenditure.

Furthermore, Ind-Ra has upheld a neutral outlook for the pharmaceuticals sector in FY26, expecting overall revenue growth of 9 percent-10 percent YoY for the sector, as firms will continue to benefit from healthy growth in the domestic chronic segment, specific opportunities in US generics, and contract development and manufacturing operations.