The business outlook for the Indian hospital industry remains Positive, reflecting expectations of continued robust operating metrics on the back of strong structural tailwinds. Despite sizeable greenfield and brownfield expansions planned across metros, tier-II and tier-III cities, the credit profile of ICRA’s sample set of companies is projected to remain healthy, given the strong accrual expectations.

• ICRA’s sample set1 of Indian hospital companies is expected to witness robust revenue growth of 16-18% in FY2026 and 18-20% in FY2027, supported by sustained high occupancy rates and healthy average revenue per occupied bed (ARPOB). Additionally, the ongoing cost optimisation initiatives are expected to support healthy operating profit margins (OPM) of 22-24% in FY2026 and FY2027, in line with 23.6% in FY2025.

• ICRA’s sample set of companies witnessed a YoY growth of 16% in revenues in H1 FY2026 on the back of buoyant occupancy levels of 63.3% and a 7.8% YoY increase in ARPOB. The OPM in H1 FY2026 remained healthy at 23.7%, supported by improved case mix, benefits of cost optimisation and optimal payor mix.
• The aggregate occupancy for ICRA’s sample set of companies is projected to remain healthy at 62- 64% in FY2026 and FY2027, in line with 63.5% in FY2025, driven by sustained strong demand for healthcare services.

Exhibit 1: Quarterly trend in occupancies (%) of ICRA’s sample set of companies

Source: Company data; ICRA Research; Aggregate of 11 listed companies - Apollo Hospitals Enterprise Limited, Aster DM Healthcare Limited, Fortis Healthcare Limited, Global Health Limited, Healthcare Global Enterprises Limited, Jupiter Life Line Hospitals, Krishna Institute of Medical Sciences Limited, Max Healthcare Institute Limited, Narayana Hrudayalaya Limited, Rainbow Children’s Medicare Limited and Shalby Limited