Indian Healthcare M&A Surges Past ₹10,000 Crore in Q2FY26 Led by Hospital and Diagnostics Expansion

India's healthcare sector achieved one of its strongest quarters in recent years, recording over ₹10,000 crore in M&A transactions during Q2FY26, according to EY-Parthenon's quarterly sector update. The exceptional performance was driven by rising demand for high-acuity care, rapid diagnostics expansion, and aggressive capacity additions by leading hospital chains. Deal activity remained broad-based across hospitals, diagnostics, and specialty care, comprising buyouts, minority investments, and cross-border acquisitions.

Hospital Networks Drive Major Expansion

India's largest hospital networks are executing their most ambitious expansion plans, with commitments to add over 18,000 beds within the next three to five years. High-end clinical specialties including oncology, cardiology, neurology, and gastroenterology drove significant increases in patient volumes and pricing power across the sector.

Major hospital chains including Apollo Hospitals, Max, Aster, NH, and KIMS reported double-digit revenue growth alongside stable to rising occupancy rates and stronger international patient flows. The revenue growth was supported by higher case complexity and improved pricing discipline across networks.

Diagnostics Sector Leads Performance

Diagnostics chains significantly outperformed other healthcare segments, recording impressive growth metrics and profitability improvements. The sector benefited from scale efficiencies and an accelerated shift toward advanced testing capabilities.

The strong performance reflected increased adoption of genomics, molecular testing, and oncology diagnostics. Preventive and wellness packages contributed significantly to quarterly revenue for select chains, driven by rising out-of-pocket spending and deeper market penetration into Tier-3 and Tier-4 cities. Industry consolidation continued with integration of recent acquisitions including Core Diagnostics, DAPIC, and Scientific Pathology across various networks.

Major M&A Transactions Shape Market

Several significant deals defined the quarter's M&A landscape, demonstrating continued investor confidence in the healthcare sector's growth prospects.

These transactions highlight the sector's focus on regional consolidation and international expansion, with companies seeking to strengthen their market positions through strategic acquisitions.

Specialty Care and Medical Technology Growth

Single-specialty chains, particularly oncology and mother-and-child operators, reported steady occupancy improvements driven by clinician additions and capacity expansion in high-growth clusters. Medical device companies delivered healthy revenue growth supported by capacity commissioning and global acquisitions in cardiology and orthopedics segments.

Healthcare assets continued commanding premium valuations, with listed-company EV/EBITDA multiples ranging from mid-teens to above 30x. Investors increasingly favored integrated platforms and technology-enabled offerings while encouraging portfolio companies to expand into Tier-2 and Tier-3 markets.

Market Outlook and Investment Sentiment

Kaivaan Movdawalla, National Healthcare Leader at EY-Parthenon, stated: "Q2 FY26 reinforces the structural strength of India's healthcare sector. The clear shift toward high-acuity care and the rapid rise of advanced diagnostics reflect a sector poised for long-term, durable growth."

EY expects momentum to remain firm through FY26, supported by rising consumption, expanding insurance penetration, and newly commissioned hospital capacity. Amit Gupta, Partner – Healthcare & Life Sciences Investment Banking at EY, noted that "scalable platforms with strong unit economics and clear expansion pathways will command sustained premiums" as both strategic and financial buyers build long-term sector exposure.