A recent industry outlook from credit rating firm ICRA suggests that revenues in India’s hospital sector are poised to accelerate in the fiscal year 2027, building on solid performance in the current year. The report indicates that revenues for the nation’s hospital industry could expand by 18–20 per cent in FY2027, up from the 16–18 per cent estimated growth in FY2026.
The positive revenue projection is based on data from a group of 11 major publicly-listed hospital companies and reflects strong underlying performance drivers. According to ICRA, “sustained high occupancy and healthy average revenue per occupied bed (ARPOB)” are supporting the sector’s expansion.
ICRA’s analysis highlights continued momentum in key operating metrics. In the first half of FY2026, the sample companies reported a 16 per cent year-on-year increase in revenue, underpinned by robust occupancy levels of 63.3 per cent and a 7.8 per cent rise in ARPOB.
Commenting on the outlook, Mythri Macherla, Vice President and Sector Head of Corporate Ratings at ICRA, said, “The performance of the Indian hospital industry is expected to remain strong in FY2026 on the back of healthy occupancy and ARPOB.” The report forecasts that occupancy for the sample companies will stay elevated at around 62–64 per cent, compared with 63.5 per cent in FY2025, while ARPOB is anticipated to grow by 6–8 per cent.
Operating profitability also remains a strength, with cost-efficiency measures and improvements in case mix helping sustain healthy margins. ICRA projects that operating profit margins (OPM) will stay in the 22–24 per cent range in FY2026 and FY2027, supported by ongoing optimization efforts.
The report further notes that despite significant planned expansions — including both new facilities and upgrades across major cities as well as tier-II and tier-III towns — the credit profiles of the hospital companies in the sample are expected to remain stable, thanks to strong expected earnings.