India Hospitals Strong topline; margin drag from expansion and higher doctor costs

Research evidence excerpt

India Hospitals Strong topline; margin drag from expansion and higher doctor costs

J P M O R G A N Asia Pacific Equity Research

04 July 2026

India Hospitals

Strong topline; margin drag from expansion and higher

doctor costs

We expect the companies under our coverage to deliver solid top-line and EBITDA Pharmaceuticals & Healthcare

growth of 17% and 18% YoY, respectively, in 1QFY27 (hospitals business: 17% Services

revenue growth and 14% EBITDA growth). Growth should be driven by capacity Bansi Desai, CFA AC

additions (+16% YoY) and a 5% YoY increase in ARPOB. We also expect occupancy (91 22) 6157 3581

to improve by ~60 bps YoY to 63%, reflecting a steady ramp-up in utilization of the bansi.desai@jpmorgan.com

incremental beds added over the past year. While the Middle East conflict has affected Amlan Jyoti Das

international patient volumes, we believe the impact has been less severe than initially (91 22) 6157 3574

feared and remains largely contained. We forecast sector margins to be broadly flat amlan.das@jpmchase.com

J.P. Morgan India Private Limited, J.P. Morgan

YoY but down ~60 bps QoQ; hospital segment margins are expected to decline by ~60 Tower, Santacruz(E), Mumbai - 400098, SEBI

bps YoY and ~100 bps QoQ, pressured by higher doctor hiring/retention costs as well Registration: INH000001873, (91-22) 6157-3000.

as losses from newly commissioned units.

Within our coverage, we expect Apollo Hospitals, Rainbow Hospitals, and Global

Health to post a strong quarter, while Max Healthcare and Fortis could face margin

pressure for the reasons noted above, compounded by the continued impact of

oncology drug discontinuation for CGHS patients.

Our top picks are Apollo Hospitals, Max Healthcare and Fortis.

Apollo Hospitals (OW)