Volume, higher realisations to drive further gains for hospital stocks

Given bed additions in FY26, investors may focus on ramp-ups of newly launched facilities to gauge demand, competitive intensity, and earnings trends over the next two years

While Q2FY26 is expected to be mildly disappointing for the hospital sector, there’s a lot of investor optimism for the future. This comes after a favourable revision in rates for Central Government Health Scheme (CGHS) procedures, as well as expectations of rising occupancy and growth in average revenue per operating bed (ARPOB).

 

Q2FY26 may be relatively soft for hospitals, due to lower incidence of seasonal vector-borne diseases.

 

However, bed additions could result in volume momentum with operating beds up by over double-digit percentages year-on-year (Y-o-Y) with an improving mix, implying steady ARPOB gains.

 

This could drive revenue up by over