A likely good start to FY27 – Domestic, M&A and bed expansion impact in focus

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A likely good start to FY27 – Domestic, M&A and bed expansion impact in focus

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Healthcare - India

A likely good start to FY27 – Domestic,

M&A and bed expansion impact in focus

Price Objective Change

1QFY27 preview supports stock momentum 09 July 2026

The healthcare sector has outperformed the broader market given the perceived Equity

resilience in earnings amidst macro volatility and specific sector tailwinds (better than India

expected base margins, sema & Fx). Moreover, 1QFY27 earnings estimates do suggest Healthcare

limited downside to consensus earnings in FY27 & reflected in the re-rating of the Neha Manpuria >>

pharma stocks (10-30% since April lows) led by US focused stocks & domestic cos). In Research Analyst

hospitals, we have seen divergence in stock performance in large caps reflecting the BofAS+91 22India6632 8307

earnings revision over the last year as we enter the bed expansion phase. We believe neha.manpuria@bofa.com

ability to manage margin outlook as companies add bed capacity in a competitive Charul Agrawal >>

market and M&A will be key drivers for hospital stocks. APHS & TRP are our key picks in ResearchBofAS IndiaAnalyst

the sector with scope for consensus earnings upgrade & value unlocking. We also revise +91 22 6632 8255

PO and estimates for companies in our coverage (See exhibit 14). charul.agrawal2@bofa.com

Pharma: US holds steady as domestic outperforms

We expect most cos to maintain the US base from Mar qtr in1QFY27 with Fx being a

tailwind given the 3.6% INR weakness QoQ. IQVIA data for 3M ended May-26 (ex-

gRevlimid & gTolvaptan) indicating flattish trends for most cos (see our note here).

However, the positive surprise in 1Q would be from the domestic segment given the Exhibit 1: Summary of estimate and PO