Will Apollo, Max, Metropolis outshine peers in Q2? Here's what analysts say

The healthcare sector is expected to post selective resilience in the September quarter of financial year 2026 (Q2FY26) despite seasonally weak trends, extended monsoons, and the festive period delaying elective procedures, analysts said. 

 

Domestic brokerage firm Nuvama analysts forecast a modest sequential slowdown but a healthy ~17 per cent year-on-year (Y-o-Y) Ebitda growth, led by hospitals and diagnostics. Within the space, Apollo Hospitals, Max Healthcare, and Metropolis Healthcare remain the top analyst picks, while Fortis Healthcare is also likely to deliver a strong quarter.

 

“We reckon Fortis, Max and Metropolis shall post good numbers, whereas Vijaya and APHS would post softness. Jupiter Life, Dr Lal, Medplus and Laxmi Dental remain on a firm path,” Aashita Jain, Shrikant Akolkar, Gaurav Lakhotia and Tanay Parab of Nuvama said, in a note dated October 8, 2025.

 

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Soft quarter, but resilience in select names

 

Sector Ebitda is estimated to expand ~17 per cent Y-o-Y, supported by an ~18 per cent rise in hospitals and ~12 per cent growth in diagnostics, according to analysts. The softer growth versus Q1 stems from lower seasonal incidences and a high base effect. Analysts noted that diagnostic companies are expected to report 11-12 per cent organic growth, maintaining margin resilience despite subdued volume trends.

 

Within hospitals, volume growth is likely to stay muted, with overall occupancy seen ~560 basis points lower Y-o-Y. Apollo Hospitals is expected to post ~8 per cent Y-o-Y growth in hospital revenue, aided by a ~16 per cent rise in average revenue per occupied bed (ARPOB), though occupancy could dip to 67 per cent from 73 per cent last year. Apollo’s pharmacy business is set to remain a bright spot with ~17 per cent Y-o-Y growth, while its digital arm (24/7) continues to expand steadily.

Fortis, Max likely to outperform peers

 

Fortis Healthcare is projected to record robust ~20 per cent Y-o-Y hospital revenue growth and maintain strong ~23 per cent Ebitda margins, aided by the Shrimann acquisition and incremental beds. Occupancy is expected near 70 per cent, with ARPOB up ~10 per cent Y-o-Y. Its diagnostics arm, Agilus, is likely to see ~8 per cent Y-o-Y growth and margin expansion to ~24 per cent.

 

Max Healthcare may also deliver a solid ~22 per cent Y-o-Y revenue jump, supported by healthy performance at existing hospitals and contributions from four new ones. Occupancy is seen at ~77 per cent versus 81 per cent Y-o-Y, reflecting capacity additions, while margins may remain stable at ~26.6 per cent.

Diagnostics: Metropolis leads, seasonality weighs on Vijaya

 

The diagnostics segment is likely to show ~15 per cent Y-o-Y revenue growth, though monsoon-related disruptions and a festive slowdown could impact sample volumes. Metropolis Healthcare is expected to remain the standout performer, delivering ~23 per cent Y-o-Y reported growth (+12 per cent organic), followed by Vijaya Diagnostics and Dr Lal PathLabs at ~12 per cent and ~11 per cent Y-o-Y, respectively.

Outlook: Triggers ahead for earnings upgrades

 

While Q2 is shaping up as an unusually soft quarter, analysts at Nuvama believe growth could shift to the second half of FY26, benefiting from a low base and improving demand momentum. Key factors to watch include hospital commentary on Central Government Health Scheme (CGHS) price revisions, upcoming bed expansions, and acquisition-led growth in diagnostics.

 

Meanwhile, top picks include Apollo Hospitals, Max Healthcare, Metropolis Healthcare, and Vijaya Diagnostics, analysts said.