Private hospitals in India are set to report 14–15% revenue growth in fiscal 2027, according to CRISIL Ratings. This marks the fifth consecutive year of double-digit growth, supported by high bed occupancy and rising average revenue per occupied bed (ARPOB), reflecting the increasing share of complex, high-value procedures.

CRISIL’s analysis of 98 private hospitals, accounting for nearly two-thirds of the sector’s Rs 78,500 crore revenue in FY25, shows ARPOB is expected to rise 5–7% to ~Rs 52,200 next fiscal. Specialties such as cardiology, oncology, neurology, gastroenterology, and orthopaedics (CONGO) now constitute 62% of treatments, up from 59% pre-pandemic.

Expanding insurance coverage, recent CGHS rate revisions, and GST exemptions on premiums are expected to further boost patient volumes while reducing out-of-pocket costs, according to CRISIL Ratings.

“CONGO specialties now make up ~62% of treatments, up from 59% pre-pandemic, boosting ARPOB. Combined with CGHS rate revisions and GST exemptions on health insurance, patient volumes and bed occupancy are expected to stay around ~65%, supporting 14–15% revenue growth,” Anuj Sethi, Senior Director, CRISIL Ratings/

As per EY-Parthenon India’s Q2 FY26 Healthcare Sector Update, 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, 

Organic growth and record investments

Occupancy is projected at ~65%, with new facilities achieving breakeven in 12–18 months, compared to 3–4 years previously. This, along with operating leverage, supports 20–21% operating margins despite high capital expenditure. Expansion combines brownfield and greenfield projects with selective acquisitions, enabling faster stabilisation and early cash flows.

Over FY24–26, large private hospital chains invested ~Rs 11,000 crore to acquire 4,300 beds, with most funding sourced from internal accruals, equity, and moderate borrowing. Organic bed additions are expected to reach over 10,000 beds across FY26–27, more than doubling previous years’ additions, focused on metros, high-ARPOB clusters, and select Tier-2 cities.

Business outlook

Capex for organic expansion is projected at ~Rs 13,000 crore in FY27, up from ~Rs 12,000 crore this fiscal. Despite elevated investments, debt reliance is expected to remain limited, keeping key metrics healthy: interest coverage ~6x and debt-to-EBITDA ~1.7x.

CRISIL notes that sustaining occupancy and ARPOB, managing high acquisition valuations, and timely ramp-up of new capacities without margin pressure will be critical to maintaining growth momentum.