Positive outlook for the hospital sector
Credit rating agency ICRA has projected that revenues for listed corporate hospitals in India will grow by 16–18 per cent in FY26, supported by sustained demand and healthy utilisation levels. The agency has maintained a positive outlook on the sector, underpinned by strong accruals and ongoing capacity expansion across leading chains.
Occupancy, ARPOB to drive growth
For its sample set of hospital chains, ICRA expects bed occupancy levels to range between 62% and 64% in FY26, compared with 63.5% recorded in FY25. Average revenue per occupied bed (ARPOB) is forecast to increase by 6–8 per cent, providing a key lever for topline growth in the coming year.
Strong first half sets the tone
The growth forecast for FY26 is anchored in a robust performance in the first half of the fiscal year, when the sample set posted approximately 16 per cent revenue growth. During H1 FY26, bed occupancy stood at 63.3 per cent, while ARPOB expanded by 7.8 per cent, reflecting steady patient inflows and an improving case mix.
“The performance of the Indian hospital industry is expected to remain strong in FY2026 on the back of healthy occupancy and ARPOB,” said Mythri Macherla, Vice President and Sector Head, Corporate Ratings, ICRA. She added that despite ongoing greenfield and brownfield expansion by leading hospital chains, their credit profiles are likely to remain healthy, supported by strong accrual expectations.
Margins and expansion outlook
Operating profitability remains resilient, with the operating profit margin for the sample set at 23.7 per cent in H1 FY26. According to ICRA, the combination of healthy margins and internal accruals is expected to support the sector’s expansion plans without materially weakening balance sheets.
Stable outlook for the pharma sector
ICRA has also retained a stable outlook on the pharmaceutical sector, projecting revenue growth of 9–11 per cent for its sample set in FY26. Operating profit margins are expected to remain in the range of 24–25 per cent, with robust demand from domestic and European markets anticipated to offset pricing pressure and revenue moderation in the US due to price erosion in certain therapies.
