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We expect Q1 to be another strong quarter for hospitals, while growth rebounds for diagnostics companies following a tepid Q4. We bake in 21%/25% growth in sales/EBITDA, respectively, for hospital stocks under our coverage, mainly on the back of volume growth (OBD up 22% YoY), while ARPOBs contract 1% YoY. Among our Healthcare universe, Rainbow is likely to report a tepid quarter (+8%/7% growth in revenue/EBITDA) owing to seasonality. For diagnostics companies, after the softness witnessed during Q4FY25, we expect rebound in the revenue trajectory, with Metropolis leading the pack (bolstered by inorganic growth) and Vijaya growing in the high teens with six hubs being launched in Q1FY26. Observations from our diagnostics pricing exercise point to a favorable pricing environment for organized operators, as major online players have hiked pricing selectively for non-routine tests in Q1.

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