India’s healthcare sector posted a resilient performance in the second quarter of FY26, supported by strong demand for high-end clinical specialties, steady capacity expansion by hospital chains, and accelerating consolidation in diagnostics, according to EY-Parthenon India’s Q2 FY26 Healthcare Sector Update. 

Deal activity remains robust 

Deal activity remained robust during the quarter, with announced transactions exceeding ₹10,000 crore across hospitals, diagnostics, and specialty care. These included buyouts, minority investments, and cross-border acquisitions. Private equity and strategic investors continued to focus on platforms with scalable regional footprints, strong clinical depth and technology-enabled delivery models, the report mentioned. 

Healthcare assets continued to command premium valuations, particularly in diagnostics and high-growth specialty segments. Enterprise value-to-EBITDA multiples for leading listed healthcare companies ranged from the mid-teens to over 30 times, reflecting investor confidence in long-term demand fundamentals and consolidation-driven growth. 

Operational metrics across hospital chains 

Operational metrics across hospital chains showed sustained improvement. Average revenue per occupied bed (ARPOB) across leading networks increased by 10–16% year-on-year, driven by pricing discipline and a shift toward higher-acuity procedures. Large hospital operators also continued to expand aggressively, with leading chains planning to add more than 18,000 beds over the next three to five years through a mix of greenfield projects and selective acquisitions. 

Kaivaan Movdawalla, National Healthcare Leader at EY Parthenon India, said the quarter highlighted the sector’s structural strength. He noted a sustained shift toward high-acuity specialties such as oncology, cardiology and neurology, alongside rising occupancy levels and double-digit ARPOB growth. Diagnostics players, he added, are moving up the value chain with increased investments in genomics, oncology, and AI-led testing platforms. 

Diagnostics segment continues to outperform 

The diagnostics segment continued to outperform in Q2 FY26, with leading chains reporting on-year revenue growth of 10–22%. Growth was driven by rising volumes from Tier 3 and Tier 4 cities, expansion of direct-to-consumer channels, and higher demand for complex testing. Several diagnostics companies reported EBITDA margins of 25–35%, aided by operating leverage and network optimisation. 

Amit Gupta, Partner – Healthcare and Life Sciences Investment Banking at EY, said investor interest in healthcare remained strong, as reflected in sustained private equity investments and strategic acquisitions. Investors are increasingly favouring integrated healthcare models and technology-enabled assets with clear expansion pathways into Tier 2 and Tier 3 markets, he said. 

Multi-specialty hospitals delivering strong growth 

Multi-specialty hospitals also delivered strong growth, reporting 9–28% on-year revenue increases, supported by healthy occupancy levels, favourable case mix and rising contributions from international patients and digital health offerings.