Dr. Agarwal's: Expanding Reach, Boosting Profitability

Ashwin Thakker

— 2 min read

Key Facts on Outlook:

  • Targeted addition of 42 new facilities across India in the next three quarters of FY26.
  • Anticipated consistent improvement in PAT margins over the next 2-3 years.
  • Projected Return on Capital Employed (ROCE) increase of 1% to 1.5% for FY26 on a consolidated basis (targeting 17-17.5%).
  • Confirmed CAPEX of INR 310 crores for FY26 to support network expansion.
  • Continued focus on high-end surgical procedures to drive value growth and yield per patient.

Dr. Agarwal's Health Care kicked off FY26 with strong Q1 results, showcasing significant growth. The company revealed ambitious plans to expand its footprint and enhance profitability, providing clear forward-looking guidance. This sets the stage for sustained growth through strategic network additions and margin improvements.

Expanding Footprint and Value Growth

Dr. Agarwal’s Health Care announced plans to add 42 new facilities across India in the next three quarters of FY26, signaling robust network expansion. This strategy targets increased presence in key markets, including a strategic entry into Delhi NCR. The company highlighted its focus on value growth, driven by premium services and high-end surgical procedures. Rahul Agarwal noted,

Overall, from a volume perspective, we had a 9% growth, and I'm largely focusing on the domestic market on this. We had a 9% volume growth, which was led largely by the OPD growth that we got.

The strong 72% year-on-year growth in Femto cataract surgeries further reflects successful premiumization.

Financial Outlook and Efficiency Gains

Dr. Agarwal’s Health Care anticipates consistent PAT margin improvement over the next 2-3 years, driven by operational efficiencies and a premium service mix. CFO Yashwanth Venkat projected a 1% to 1.5% increase in consolidated Return on Capital Employed (ROCE) for FY26, building on ~16% in March 2025. This sets a target of 17-17.5% ROCE. The company confirmed a stable CAPEX of INR 310 crores for FY26, funding its ambitious expansion without undue financial strain. The ongoing merger of the listed subsidiary with the holding company is also on track, expected within 1-1.5 years, aiming to further streamline operations.

Dr. Agarwal's Health Care demonstrates a clear strategic path for growth and enhanced profitability. By focusing on aggressive network expansion, driving value through high-end services, and improving operational efficiencies, the company is well-positioned for sustained financial performance. The firm's forward guidance reflects confidence in its ability to deliver consistent margin expansion and strong ROCE in the coming years.

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