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Indian Hospital Sector Poised for Double-Digit Growth in FY26, ICRA Report Says
According to the ICRA report, strong occupancy rates and rising average revenue per occupied bed (ARPOB) will be the primary growth drivers. The agency expects bed occupancy levels for its sample of hospital companies to hold steady between 62% and 64% in FY26, close to FY25’s figures, while ARPOB is anticipated to climb 6–8% year-on-year.
- By Newsdesk
- New Delhi
- Dec 30, 2025
The Indian hospital industry is set to deliver robust revenue expansion in the current financial year, with credit rating agency ICRA forecasting a 16–18% increase in topline for FY2026 compared to the previous year. The projection reflects sustained patient demand and improving utilisation metrics across major listed hospital chains.
According to the ICRA report, strong occupancy rates and rising average revenue per occupied bed (ARPOB) will be the primary growth drivers. The agency expects bed occupancy levels for its sample of hospital companies to hold steady between 62% and 64% in FY26, close to FY25’s figures, while ARPOB is anticipated to climb 6–8% year-on-year.
“Performance in the 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 at ICRA, underlining the continued resilience of the sector.
The positive outlook is anchored in a solid first half of the fiscal year, during which ICRA’s sample set already recorded a 16% revenue gain, supported by steady occupancy of 63.3% and a 7.8% increase in ARPOB. Operating profitability has also remained healthy, with the operating profit margin (OPM) holding near 23.7% in H1 FY26.
ICRA notes that ongoing expansion, both through new hospital builds and capacity increases at existing facilities should support future growth without significantly weakening credit profiles, thanks to robust internal accruals.
In addition to the hospital sector, ICRA maintained a stable outlook for the pharmaceutical industry, projecting 9–11% revenue growth for its sample set of pharma companies in FY26, buoyed by solid demand in domestic and European markets.