India’s healthcare sector, which showed resilience in Q2FY26, is projected to maintain its positive performance throughout the rest of FY26, as per a report. The sector witnessed a robust Q2FY26 with increasing demand for advanced clinical specialties, steady expansion of hospital chains, and notable consolidation in diagnostics. Moving forward, the sector is expected to sustain its growth momentum with higher healthcare utilization, upcoming capacity expansions, and ongoing investor interest.
The report highlighted that while there might be short-term margin pressures for newly established assets, the sector’s medium-term prospects remain strong due to favorable demographics, expanding insurance coverage, and growing need for specialized healthcare services. Mergers and acquisitions activities remained active in the last quarter, with the healthcare sector witnessing transactions worth over Rs 10,000 crore in hospitals, diagnostics, and specialty care during Q2FY26.
Notably, healthcare assets, especially in diagnostics and high-growth specialty segments, continued to command premium valuations. Leading hospital networks recorded a 10-16% year-on-year increase in average revenue per occupied bed (ARPOB), with significant expansion efforts by major hospital chains. The National Healthcare Leader at EY Parthenon India emphasized the sector’s structural strength, highlighting the shift towards high-acuity specialties like oncology, cardiology, and neurology.
The healthcare industry’s growth trajectory is further supported by plans of major hospital chains to add more than 18,000 beds in the next few years, alongside diagnostic companies reporting substantial revenue growth in Q2FY26. The revenue surge was primarily driven by increased testing volumes in Tier 3 and Tier 4 cities, expanded B2C channels, and a rising demand for complex diagnostic services. Additionally, several diagnostics firms reported healthy EBITDA margins ranging from 25-35%, backed by operational efficiencies and network enhancements.
