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India's healthcare sector recorded strong growth in the fourth quarter and full fiscal year 2026, driven by revenue expansion across hospital networks and diagnostics, sustained capacity additions, and solid investor interest, according to the EY-Parthenon Report. Sector growth was supported by higher patient volumes, improving revenue realizations, and a steady shift toward complex, high-acuity medical treatments.
Major hospital chains served as the principal growth driver, delivering over 15 per cent year-on-year (YoY) growth in both revenue and EBITDA. Hospitals maintained stable operational performance with occupancy levels between 60 per cent and 75 per cent, along with gains in average revenue per occupied bed. High-acuity specialties, particularly cardiology and oncology, grew at rates exceeding 15 per cent, capturing a larger share of total hospital revenues. Commenting on the sector performance, Kaivaan Movdawalla, National Healthcare Leader at EY-Parthenon India, highlighted the underlying strategic changes taking place across the industry. "We are witnessing a structural shift in the sector, with players increasingly focusing on disciplined expansion through brownfield and greenfield projects, strategic partnerships, and selective acquisitions," Movdawalla said. "Coupled with strong investor interest and a robust pipeline of public market activity, the healthcare sector remains well-positioned for sustained growth in the coming year," he added. Organized diagnostics providers also recorded revenue growth above 15 per cent YoY, maintaining average EBITDA margins above 25 per cent. These companies expanded their operational footprint through additional laboratories, radiology centers, and patient collection points across multiple regions. Similarly, single-specialty hospital operators delivered health revenue growth over 15 per cent with EBITDA margins hovering around 30 per cent. Conversely, as per the report, medical device manufacturers experienced muted performance, partly due to the impact of United States tariffs. Profitability in the segment faced pressure from higher raw material costs, global logistics bottlenecks, and expenses tied to corporate acquisitions and physical expansion. Investment activity across healthcare remained firm, supported by private equity interest despite a sequential decline in transaction volumes during the fourth quarter. Valuations maintained an upward trend, reflecting market confidence in long-term expansion and premium pricing for high-growth platforms. Analyzing the transaction environment, Amit Gupta, Partner - Healthcare and Life Sciences Investment Banking at EY India, pointed to ongoing deal activity across market segments. "Deal activity in healthcare remains buoyant. The trend of PE-backed strategic buyouts in the hospital segment has strengthened over FY26, as investors look to build regional clusters," Gupta said. "In diagnostics, capital deployment is increasingly directed toward integrated segment, digital infrastructure and entry into emerging markets. As sector consolidation accelerates and balance sheets improve, transaction momentum is expected to sustain through FY27," he noted. According to the report, the sector outlook remains positive, anchored by increasing chronic disease prevalence, rising public health awareness, continuous network expansions, and active mergers and acquisitions. (ANI)
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