India hospitals Follow the cash flows

Research evidence excerpt

India hospitals Follow the cash flows

21 July 2026

India hospitals EquitiesHealth Care Providers &

Srvcs

Follow the cash flows India

◆ We analyse growth (revenue and EBITDA) and cash flows for Damayanti Kerai*

covered hospitals to compare execution and visibility ahead Analyst, India Healthcare HSBC Securities and Capital Markets (India) Private

Limited

◆ OCF/EBITDA remains healthy though FCF conversion trends damayantikerai@hsbc.co.in

indicate continued heavy expansion phase for a few hospitals +91 88 7933 5196

Bhavya Gandhi*

◆ We prefer Buy-rated Apollo Hospitals and Fortis Healthcare Associate, Equity Research

HSBC Securities and Capital Markets (India) Private

among covered hospitals Limited

bhavya.gandhi@hsbc.co.in

+91 22 40891593

Healthy growth outlook: We expect covered hospitals to sustain healthy growth trends

with average revenue/EBITDA CAGR of 15.5%/18.3% during FY27-29e (vs FY20-26 * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

revenue/EBITDA CAGR of 15.4%/21.7%). While both mix improvement and capacity not registered/ qualified pursuant to FINRA regulations

expansion supported revenue and EBITDA growth in the past, we think capacity scale-up

and execution of new hospitals will be the key growth driver in the coming years.

Cash conversion trends: While there is a comfortable outlook for revenue and EBITDA

growth, one of the key debates for hospitals is around their ability to generate free cash

flows. Our analysis of trends over FY20-26 indicates covered names were reasonably

efficient in cash conversion with average OCF/EBITDA of 85% and we assume a similar

range for FY27-29 (see Exhibit 3). As expected, FCF trends were a function of the

individual investment phase for each of the covered names (e.g. negative FCF for KIMS