New Delhi: India’s healthcare sector recorded a cumulative deal value of over Rs.10,000 crore in Q2 FY26, driven by robust mergers and acquisitions activity across hospitals, diagnostics and specialty care, according to EY-Parthenon India’s Q2 FY26 healthcare sector findings.
The quarter witnessed a steady flow of buyouts, minority investments and cross-border acquisitions, underscoring sustained investor interest in platforms with scalable regional footprints, strong clinical depth and technology-enabled delivery models. Private equity and strategic investors remained active, particularly in diagnostics and high-growth specialty segments.
From a valuation perspective, healthcare assets continued to command premium multiples, with EV/EBITDA multiples for leading listed players ranging from the mid-teens to over 30x, reflecting confidence in long-term demand and consolidation-led growth.
Hospital operators reported 10–16 per cent year-on-year growth in average revenue per occupied bed (ARPOB), supported by pricing discipline and a shift towards higher-acuity procedures. Leading hospital chains collectively plan to add over 18,000 beds over the next three to five years through a mix of greenfield projects and selective acquisitions.
Commenting on the findings, Kaivaan Movdawalla, National Healthcare Leader, EY-Parthenon India, said the quarter highlighted the sector’s structural strength, marked by a sustained shift towards oncology, cardiology and neurology, alongside rising occupancy levels and double-digit ARPOB growth. He added that diagnostics players are increasingly investing in genomics, oncology and AI-led testing platforms, positioning the sector for long-term growth.
The diagnostics segment outperformed, with leading chains reporting 10–22 per cent year-on-year revenue growth in Q2 FY26. Growth was driven by rising volumes in tier 3 and tier 4 cities, expansion of B2C channels and higher demand for complex testing. Several players reported EBITDA margins of 25–35 per cent, supported by operating leverage and network optimisation.
Amit Gupta, Partner – Healthcare and Life Sciences Investment Banking, EY, said investor interest remained robust, with a growing preference for integrated healthcare models and technology-enabled assets, particularly those expanding into tier 2 and tier 3 markets. These platforms, he noted, continue to command premium valuations.
Within diagnostics, investment focus has shifted decisively towards genomics, oncology and molecular testing, while preventive and wellness programmes contributed up to 26 per cent of quarterly revenues for some players.
Multi-specialty hospitals reported 9–28 per cent year-on-year revenue growth, supported by higher occupancy, a favourable case mix and sustained growth in complex specialties. Average occupancy levels ranged between 54–77 per cent for mature assets, while international patient revenues and digital health offerings emerged as incremental growth drivers for select operators.
According to EY, the momentum is expected to continue through the remainder of FY26, supported by rising healthcare utilisation, ongoing capacity additions and sustained investor interest. While near-term margin pressures may persist for newly commissioned assets, medium-term fundamentals remain strong, aided by favourable demographics, expanding insurance coverage and growing demand for specialised care.
