Nuvama sees strong Q3FY26 growth for Healthcare stocks

Listed healthcare companies are expected to report robust earnings growth in the third quarter of FY26, supported by steady demand across hospitals, diagnostics and pharmacy segments, according to a report by brokerage firm Nuvama .

The brokerage projects overall EBITDA growth of nearly 22 per cent year-on-year (YoY) for its healthcare coverage universe in Q3FY26 , driven largely by hospitals and diagnostics, both expected to post EBITDA growth of a similar magnitude.

Despite Q3 traditionally being a seasonally softer period for hospitals due to fewer elective procedures, the sector is expected to maintain healthy momentum, backed by strong structural demand drivers such as rising chronic disease incidence, higher insurance penetration and expanding healthcare infrastructure.

“We expect Q3FY26 EBITDA of our healthcare coverage to expand by around 22 per cent YoY, propelled by approximately 22 per cent growth in hospitals and diagnostics,” the report said.

The diagnostics segment is expected to deliver 13 per cent organic revenue growth during the quarter, along with a margin expansion of nearly 107 basis points YoY . Including acquisitions, diagnostics revenue and profit after tax (PAT) are estimated to rise 17 per cent and 25 per cent YoY , respectively.

Nuvama noted that Q3 performance in diagnostics could exceed earlier expectations due to a recovery in specialty and allergy testing, a favourable base effect and supportive festival timing. Over the past year, diagnostics companies have seen steady volume growth, improved test mix and gradual normalisation of pricing post-pandemic, setting the stage for margin recovery in FY26.

Hospital operators under Nuvama’s coverage are expected to report nearly 15 per cent YoY revenue growth in Q3FY26, while EBITDA is projected to grow faster at around 22 per cent YoY. The improvement in profitability is largely attributed to better operating leverage, improved occupancy levels and cost discipline.

In the previous financial year, hospital chains posted steady double-digit revenue growth, aided by higher average revenue per occupied bed (ARPOB), increasing medical tourism inflows and ramp-up of new capacities. These trends are expected to continue through FY26, with incremental bed additions and rising utilisation driving quarter-wise growth.

In the pharmacy segment, Apollo Pharmacy is expected to sustain strong momentum with revenue growth of around 17 per cent YoY in Q3FY26. MedPlus is projected to post approximately 15 per cent YoY growth, driven by rising contributions from non-pharma categories such as FMCG, private labels and wellness products.

Last year, pharmacy retailers benefited from network expansion, better supply chain efficiencies and diversification beyond prescription medicines trends that continue to support growth visibility in the current fiscal.

While seasonal factors may lead to modest quarter-on-quarter fluctuations, Nuvama believes the underlying growth outlook for the healthcare sector remains intact. Expansion in hospital capacity, consistent improvement in diagnostics demand and diversification in pharmacy revenues are expected to support stable earnings growth over the coming quarters.

Overall, the brokerage expects Q3FY26 to be a strong quarter for listed healthcare companies, marked by broad-based growth across sub-segments and sustained margin improvement, reinforcing a positive medium-term outlook for the sector.