Healthcare Sector Set for Strong Q3FY26 Earnings Growth

Sector Outlook

Listed healthcare companies in India are expected to post robust earnings growth in the third quarter of FY26, according to a report by brokerage firm Nuvama. The sector’s performance will be driven by hospitals, diagnostics, and pharmacy businesses, with overall EBITDA projected to expand 22% year‑on‑year. Despite Q3 traditionally being a seasonally weaker period for hospitals, structural growth drivers are expected to sustain momentum.

Diagnostics Segment

Diagnostics firms are anticipated to deliver organic revenue growth of about 13%, alongside margin expansion of nearly 107 basis points compared to last year. Overall, the segment’s revenue is estimated to rise 17%, while profit after tax could grow 25%. Demand for specialty and allergy tests, a favorable base effect, and supportive festival timing are expected to boost results. Acquisitions will also contribute, though organic growth remains the primary driver.

Hospitals Segment

Although Q3 is typically softer for hospitals, major players under Nuvama’s coverage are projected to report solid results. Hospital revenues are expected to grow by 15% year‑on‑year, while EBITDA growth could reach 22%, supported by improved operating leverage. This reflects the sector’s resilience and ability to sustain growth even in weaker seasonal quarters.

Pharmacy Segment

In retail healthcare, Apollo Pharmacy is forecast to maintain strong momentum, with revenues rising about 17% year‑on‑year. Medplus is projected to post around 15% growth, driven largely by increased contributions from non‑pharma categories, highlighting diversification strategies within the pharmacy segment.

Outlook

The report underscores the healthcare sector’s strong fundamentals, with hospitals, diagnostics, and pharmacies all contributing to earnings growth. With structural drivers intact, listed healthcare companies are well‑positioned to deliver healthy results in Q3FY26 despite seasonal challenges.