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Strong demand momentum expected to drive another quarter of healthy earnings growth:

We expect healthcare companies under our coverage to deliver another strong quarter. Revenues projected to grow in high teens YoY, supported by sustained demand for tertiary and quaternary care services, an improving speciality mix, healthy occupancy levels and incremental capacity addition. The continued ramp-up of newlycommissioned hospitals, increasing contribution from mature assets and steady growth in high-value specialties, such as oncology, cardiology and neurosciences are expected to remain key growth drivers.

ARPOB growth is likely to moderate on a YoY basis, reflecting a higher base and normalisation in pricing; however, it is anticipated to remain healthy, aided by favourable case mix, higher clinical complexity and price hikes. EBITDA growth is expected to outpace revenue growth across most players, driven by improving asset utilisation, better cost absorption at recently-commissioned facilities and continued efficiency initiatives.

Factors driving long-term growth Aggressive capacity expansion cycle underpins long-term growth visibility:

India's hospital sector is in the midst of one of its strongest capacity expansion phases, reflecting sustained confidence in long-term demand. ARTMSL plans to add 1,075 beds, APHS is targeting 2,200 beds by FY29, while MEDANTA aims to nearly double its capacity to ~6,855 beds by FY30. PARKHOSP intends to add 2,880 beds, FORH plans ~1,347 beds by FY29 and MAXHEALT is targeting a network of over 10,000 beds by FY30. HCG plans to add ~750 beds by FY29, YATHARTH plans to strengthen its Delhi-NCR presence with ~700 beds in the next two years and RAINBOW is set to add 810 beds by FY29 as part of its regional expansion strategy. JSLL is also pursuing an ambitious growth roadmap, targeting 7,000–10,000 beds in the next 3–5 years. The majority of these additions are focussed on high-demand metro and tier-I markets, with an emphasis on tertiary and quaternary care facilities, positioning the sector for sustained revenue growth, improved operating leverage and long-term EBITDA expansion

Premium specialities continue to anchor revenue mix:

Across listed hospital peers, the speciality mix remains firmly inclined toward high-acuity therapies, with Cardiology (9–33%) and Oncology (9–90%) continuing to account for the largest share of revenues. Most diversified hospital chains derive 30–45% of revenues from these two specialties alone, highlighting sustained focus on complex tertiary and quaternary care. FY26 saw only incremental shifts rather than structural changes, APHS maintained 19% Cardiology while Oncology moderated from 17% to 16%, MAXHEALT remained oncology-led at 24.1% (vs. 25.8% in FY25), while NARH continued to derive 33% of revenues from Cardiology.

Balanced payor mix supports revenue quality and resilience:

The industry continues to maintain a well-diversified payor profile, limiting dependence on any single revenue stream. Insurance contributes 25– 55% of revenues across major hospital chains, while domestic selfpay/cash patients account for 20–56%, reflecting a healthy balance between reimbursement-led and discretionary healthcare demand. Government-related business ranges from 1% to 35%, depending on each hospital's operating model, while international patients remain a meaningful profitability driver for select players, contributing 32% at ARTMSL, 9.1% at MAXHEALT, 7.8% at FORH, 6% at APHS and 5% at NARH. The diversified payor mix across the sector enhances revenue stability, reduces concentration risk and supports sustained occupancy and pricing power

High-conviction investment ideas We are positive on JSLL, NARH and YATHARTH hospitals

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