India Healthcare Sector Records Strong FY26 Growth; Expansion and Capacity Build-Out Drive Momentum: EY-Parthenon Report

Diagnostics

Revenue growth across organised companies demonstrated 15%+ growth with average EBITDA margins being >25%. Companies expanded their footprint aggressively through additional laboratories, radiology centres, and collection points across multiple geographies.

Single Specialty Hospitals and Medical Devices

Single specialty hospital players also demonstrated health revenue growth of >15% with EBITDA margins of around 30%. Comparatively, medical device companies reported muted growth, partly impacted by the US tariffs. Profitability was impacted by raw material cost inflation, global logistical disruptions, and integration costs related to acquisitions and capacity expansion.

Investment Activity and Deal Landscape

The healthcare sector continued to attract strong interest from private equity investors, despite a sequential decline in deal volumes in Q4FY26. Valuation trends remain robust, reflecting investor confidence in the sector’s long-term growth potential. Valuations have demonstrated northward momentum indicating premium valuations for high-growth platforms.

The outlook for the healthcare sector remains positive:

Continued demand growth driven by rising healthcare awareness and increasing chronic disease burden
Ongoing capacity expansion across hospitals and diagnostics networks
Strong pipeline of public market activity and capital inflows
Strategic consolidation through mergers, acquisitions, and partnerships

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