New Delhi, Dec 29 (NationPress) The outlook for the Indian hospital sector appears promising, with revenue projections indicating a growth of 18-20 percent in FY2027, as indicated in a report released on Monday.

The report from the credit rating agency ICRA highlights that this growth trajectory, based on data from 11 major listed hospital firms, is underpinned by consistently high occupancy rates and a robust average revenue per occupied bed (ARPOB).

In FY2026, the Indian hospital industry experienced a growth rate of 16-18 percent, which demonstrates expectations of continued strong operational metrics due to favorable structural factors.

Mythri Macherla, Vice President and Sector Head at ICRA, stated, "The Indian hospital industry's performance is projected to stay strong in FY2026, supported by healthy occupancy levels and ARPOB."

She further added that occupancy rates for the sampled companies are expected to remain solid at 62-64 percent in FY2026, compared to 63.5 percent in FY2025, with ARPOB anticipated to grow by 6-8 percent.

This follows a robust first half where the sampled companies recorded a 16 percent year-on-year revenue growth in H1 FY2026, spurred by an occupancy rate of 63.3 percent and a 7.8 percent rise in ARPOB, according to the report.

The operating profit margin (OPM) for H1 FY2026 remained strong at 23.7 percent, supported by an improved case mix and cost management strategies.

Macherla emphasized that cost optimization efforts and an enhancing case and payor mix will sustain the OPM for the sampled companies in FY2026 to range between 22-24 percent, compared to 23.6 percent in FY2025.

ICRA also noted that despite significant greenfield and brownfield expansions planned in metropolitan, tier-II, and tier-III locations, the financial health of the sampled companies is expected to remain robust, backed by strong accrual forecasts.

For the pharmaceutical sector, ICRA indicated a 'stable' outlook for FY2026, with a projected revenue growth of 9-11 percent for its sampled companies.

Macherla mentioned, "The revenues of ICRA's sampled Indian pharmaceutical companies are expected to increase by 9-11 percent in FY2026," noting that this growth will be buoyed by healthy growth rates of 8-10 percent in the domestic market and 15-17 percent in European markets, while certain key drugs like Lenalidomide may see growth moderation in the US market to 4-6 percent.

The OPM for the sampled pharmaceutical companies is expected to remain stable in the range of 24-25 percent in FY2026, as a result of strong performance in key markets and stable raw material costs.