Mumbai: India’s Healthcare sector delivered robust growth in the fourth quarter and full year ending March 2026, underpinned by strong revenue expansion across hospitals and diagnostics, sustained capacity additions, and continued investor interest, according to EY-Parthenon Healthcare Sector Update.
The growth was driven by rising patient volumes, improving realisations, and a gradual shift toward higher-acuity treatments.
The report said the hospital segment remained the primary growth engine as revenue and EBITDA growth across major hospital operators increased 15 per cent year on year, in the period.
Their performance was supported by stable occupancy levels, typically ranging between about 60 per cent and 75 per cent alongside improvements in average revenue per occupied bed (ARPOBS), EY-Parthenon added.
High-acuity specialties contributed a larger share to total revenues as specialties such as cardiology and oncology continued to grow strongly, with growth rates exceeding 15 per cent in certain cases.
In the diagnostics sector, revenue growth across organised companies was higher than 15 per cent with average EBITDA margins being higher than 25 per cent.
EY noted that the 12 month period marked aggressive footprint expansion by diagnostic companies through additional laboratories, radiology centres, and collection points across multiple geographies
In the single specialty hospitals segment, revenue growth was higher than 15 per cent with EBITDA margins of approximately 30 per cent.
In comparison, medical devices companies reported muted growth, partly impacted by the US tariffs, while profitability was impacted by raw material cost inflation, global logistical disruptions, and integration costs related to acquisitions and capacity expansion, the report said.
In terms of investment activities and deal landscape, the healthcare sector continued to attract strong interest from private equity investors, despite a sequential decline in deal volumes in Q4FY26.
The report said valuation trends remain strong, reflecting investor confidence in the sector’s long-term growth potential.
The outlook for the healthcare sector remains positive, as demand increases driven by rising health awareness and increasing chronic disease burden.
EY forecasts a strong pipeline of public market activity and capital inflows as well as strategic consolidation through mergers, acquisitions, and partnerships in the sector going ahead.
“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. 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,” said Kaivaan Movdawalla, National Healthcare Leader, EY-Parthenon India.
