India’s healthcare deals top Rs 10,000 crore in Q2FY26 as hospitals, diagnostics lead expansion: EY

healthcare

• Indian healthcare M&A topped Rs.10,000 crore in Q2 FY26, driven by strong demand
• Hospitals to add 18,000+ beds in 3-5 years amid revenue growth
• Diagnostics chains saw 10-22% revenue growth and strong EBITDA margins.

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Indian healthcare sector delivered one of its strongest quarters in recent years, clocking over Rs 10,000 crore in M&A transactions in Q2 FY26, underpinned by rising demand for high‑acuity care, rapid diagnostics expansion and aggressive capacity additions by leading hospital chains, EY‑Parthenon said in its quarterly sector update.

Deal activity remained broad‑based across hospitals, diagnostics and specialty care, comprising buyouts, minority investments and cross‑border acquisitions. Private equity and strategic investors continued to chase scalable regional platforms with strong clinical depth and technology‑enabled models, EY said.

Hospitals to add 18,000 Beds

High‑end clinical specialties—oncology, cardiology, neurology and gastroenterology—drove a sharp pickup in patient volumes and pricing power across the sector. Average revenue per occupied bed rose 10–16% year‑on‑year among large chains, aided by higher case complexity and tighter pricing discipline.

India’s biggest networks are in the middle of their most ambitious expansion cycle yet, with plans to add over 18,000 beds in the next three to five years. Apollo Hospitals, Max, Aster, NH, KIMS and several mid‑market chains reported double‑digit revenue growth, stable to rising occupancy and stronger international patient flows. Digital and home‑care‑led revenues contributed as much as 25–30 percent for some operators.

Diagnostics leads growth

Diagnostics chains again outperformed, recording 10–22 percent revenue growth. Several players posted EBITDA margins in the 25–35 percent range, benefiting from scale efficiencies and an accelerated shift toward genomics, molecular testing and oncology diagnostics. Preventive and wellness packages contributed up to 26% of quarterly revenue for select chains, reflecting rising out‑of‑pocket spending and deeper penetration into Tier‑3 and Tier‑4 cities.

Industry consolidation continued, with integration of recent acquisitions—Core Diagnostics, DAPIC, Scientific Pathology—progressing across networks. Franchise‑led expansion in smaller towns remained a significant growth lever.

Specialty hospitals, med‑tech see sustained momentum

Single‑specialty chains, including oncology and mother‑and‑child operators, reported steady improvement in occupancy, driven by clinician additions and capacity expansion in fast‑growing clusters. Medical device companies delivered healthy revenue growth backed by capacity commissioning and global acquisitions in cardiology and orthopedics.

Investor appetite strong despite valuation premiums

Healthcare assets continued to command premium valuations, with listed-company EV/EBITDA multiples ranging from the mid‑teens to above 30x, EY said. Investors increasingly favored integrated platforms and tech‑enabled offerings, while also pushing portfolio companies to expand into Tier‑2 and Tier‑3 markets.

“Q2 FY26 reinforces the structural strength of India’s healthcare sector,” said Kaivaan Movdawalla, National Healthcare Leader at EY‑Parthenon. “The clear shift toward high‑acuity care and the rapid rise of advanced diagnostics reflect a sector poised for long‑term, durable growth.”

Outlook

EY expects momentum to remain firm through FY26, supported by rising consumption, expanding insurance penetration and newly commissioned hospital capacity coming on stream. While margin pressure may persist for new assets, medium‑term fundamentals remain robust, the firm said.

“Investor interest is set to remain strong as strategic and financial buyers build long‑term exposure to the sector,” said Amit Gupta, Partner – Healthcare & Life Sciences Investment Banking at EY. “Scalable platforms with strong unit economics and clear expansion pathways will command sustained premiums.”

Some important deals in recent times

Manipal Hospitals completed a full buyout of Sahyadri Hospitals from OTPP for Rs 5300 crore as part of its ongoing multi‑specialty expansion strategy, while Baby Memorial Hospital acquired a majority stake in Meitra Hospital for Rs 1000-Rs 1200 crore, adding a premium tertiary‑care platform to its portfolio.

Fortis Healthcare strengthened its North India cluster with the Rs 470‑crore acquisition of Shrimann Hospitals in Punjab, even as Narayana Hrudayalaya made its first major overseas move with a £183‑million acquisition of Practice Plus Group Hospitals in the UK, marking its entry into that market. Yatharth Hospital also expanded its regional presence through a Rs 260‑crore purchase of a 150‑bed hospital in Agra from the local promoter group, further consolidating its footprint in North India.