<h1>Dr. Agarwal's Q1: Strong Margins, Strategic Expansion Ahead</h1>

Ashwin Thakker

— 2 min read
  • **Sales Outlook:** Targeting to launch 42 new facilities across South, West, North, and East regions in the next three quarters of FY26.
  • **Margin Outlook:** Expects consistent improvement in PAT margins over the next 2-3 years.
  • **ROCE Outlook:** Anticipates a 1-1.5% increase in consolidated Return on Capital Employed (ROCE) this year from 16% (March '25).
  • **Strategic Focus:** Continued emphasis on high-end surgeries (e.g., Femto Cataract, SMILE) to drive value growth and increase yield per patient.

Dr. Agarwal's Health Care Limited reported a robust Q1 FY26, with total income soaring to INR 501 crores and profit after tax more than doubling to INR 38 crores, underscoring strong operational efficiency. This impressive start to the fiscal year sets the stage for ambitious future plans. The company outlined its strategic vision for continued network expansion, margin enhancement, and profitability growth, driven by both organic initiatives and a focus on specialized surgical services across key regions.

Expanding Footprint for Sustained Growth

Dr. Agarwal's Health Care is set for significant geographical expansion in the coming quarters, a key driver for future revenue growth. The company aims to add 42 new facilities across India during the remainder of the current financial year. This planned expansion will see 23 centers in the South, 9 in the West, 5 in the North, and 5 in the East, diversifying its presence and reaching underserved markets.

"Over the next 3 quarters, of this financial year, we are targeting to launch another 42 new facilities, which will comprise 23 centers in the South, 9 in the West, 5 in the North and 5 in the East."

This aggressive network growth, particularly in regions like Delhi NCR with a new state-of-the-art facility already operational in July 2025 and plans for Gurgaon, is expected to enhance patient volumes and market penetration. The company's strategy combines organic growth, as demonstrated by the Telangana expansion, with strategic acquisitions to build brand equity and operational scale, ensuring a balanced growth approach.

Driving Profitability Through Strategic Focus

Beyond network expansion, Dr. Agarwal's Health Care is strategically focused on enhancing profitability and margins. The management expressed confidence in a sustained improvement in profit after tax (PAT) margins over the next 2-3 years, a direct outcome of operational efficiencies and a shift towards higher-value services. The company also anticipates a notable increase in its consolidated Return on Capital Employed (ROCE), projecting a 1-1.5% rise this year from 16% in March FY25.

"We believe you will certainly see a consistent improvement in your PAT margins over the next 2 to 3 years."

A key element of this margin strategy is the continued focus on advanced surgical procedures like Femto Cataract and SMILE, which command higher yields per patient. The successful adoption of new technologies and the opening of flagship facilities, such as the new Delhi center, are expected to contribute positively to the overall margin profile by optimizing operational costs and improving revenue realization per surgery.

Dr. Agarwal's Health Care Limited is poised for continued strong performance, building on its robust Q1 momentum. The clear strategic roadmap, focusing on extensive network expansion and a commitment to enhanced profitability through high-value services and operational efficiencies, positions the company for sustained growth and improved shareholder returns in the coming years.

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