The business outlook for the Indian hospital industry remains Positive, supported by healthy demand, buoyant occupancy levels, sustained ARPOB growth and continued preference for organised healthcare services. Despite sizeable capacity addition, the credit profile of ICRA’s sample set is expected to remain healthy on the back of strong operating cash flows from mature hospitals and comfortable debt coverage metrics.

ICRA’s sample set1 of Indian hospital companies is expected to witness a healthy revenue growth of

• 13-15% in FY2027 and 15-17% in FY2028, supported by continued bed additions and gradual ramp-up of occupancy at these new capacities. Additionally, the operating profit margin (OPM) is expected to remain in the range of 22-24% in FY2027 and FY2028 as lower margins of hospitals in the ramp-up phase are likely to partly offset the operating leverage benefits.
• ICRA’s sample set of companies witnessed a YoY growth of 18% in revenues in FY2026 on the back of buoyant occupancy levels of 63.5% and a 9.2% YoY increase in the average revenue per occupied bed per day (ARPOB). The OPM in FY2026 remained healthy at 24.1%, supported by improved case mix, benefits of cost optimisation and favourable payor mix.

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 Limited, Krishna Institute of Medical Sciences Limited, Max Healthcare Institute Limited, Narayana Hrudayalaya Limited, Rainbow Children’s Medicare Limited and Shalby Limited