Dr. Agarwal's Health Care Limited — Q2 FY26 earnings call

Call held 31 Oct 2025

Management summary

Dr. Agarwal's Health Care Limited reported a strong Q2 and H1 FY26, with H1 total income surpassing INR1,000 crores for the first time, growing 20.2% YoY to INR1,007 crores. Profitability saw significant improvement, with H1 EBITDA growing 24.9% to INR285 crores and PAT surging 88.4% to INR75 crores, driven by cost efficiencies and premiumization of services. The company continued its network expansion, adding 24 new Greenfield facilities, though growth in the North region was tempered by seasonal factors.

Highlights

  • Total income for H1 FY26 reached INR1,007 crores, up 20.2% YoY, surpassing INR1,000 crores for the first time.

  • H1 FY26 IndAS EBITDA was INR285 crores, reflecting 24.9% YoY growth, with margins improving by 100 bps to 28.3%.

  • PAT for H1 FY26 was INR75 crores, up 88.4% YoY, with PAT margins expanding by 270 bps to 7.2%.

  • Q2 FY26 IndAS EBITDA was INR144 crores, up 21.2% YoY, with margins improving by 70 bps to 28.4%.

  • Commissioned 24 new Greenfield facilities in H1 FY26, expanding footprint across 14 states and 5 union territories.

Concerns

  • Revenue growth in the North region was 14.2% YoY, lower than the Southern region's 22.2% and overall growth, impacted by unseasonal rains and festivities.

  • Africa business contribution to overall revenue declined from 10.4% in H1 FY25 to around 10% in H1 FY26.

Key financials

2 periods

Q2

  • Total Income
    ₹507 Cr
    YoY +18.2%
  • Revenue from Operations
    ₹499 Cr
    YoY +19.7%
  • IndAS EBITDA
    ₹144 Cr
    YoY +21.2%
  • IndAS EBITDA Margin
    28.4%
  • PAT
    ₹36 Cr
    YoY +71%
  • PAT Margin
    7.2%

H1

  • Total Income
    ₹1,007 Cr
    YoY +20.2%
  • Revenue from Operations
    ₹986 Cr
    YoY +20.2%
  • IndAS EBITDA
    ₹285 Cr
    YoY +24.9%
  • IndAS EBITDA Margin
    28.3%
  • PAT
    ₹75 Cr
    YoY +88.4%
  • PAT Margin
    7.2%
  • Total Surgeries Performed
    1,37,244
    YoY +14.6%
  • Total Cataract Procedures
    29,697
    YoY +41.7%
  • Robotic Cataract Surgeries
    2,616
    YoY +69%
  • Lenticular Procedures
    2,668
    YoY +11.5%
  • Retinal Surgeries
    6,205
    YoY +23%

What they filed

Q1 FY27: revenue up 26.8%, net profit up 70.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue255 268 281 302 309 +21%335 +25%348 +24%383 +27%
EBITDA58 65 73 67 69 +19%80 +23%92 +26%96 +43%
Net profit-4 8 27 10 5 +225%14 +75%11 −59%17 +70%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹857 Cr Total
  • Southern Region ₹635 Cr 74.1%
  • West Region ₹150 Cr 17.5%
  • North Region ₹72 Cr 8.4%

Capital allocation

high confidence
  • Capex ₹310 Cr
    • Flagship projects ₹70 Cr
    Yes, INR310 crores, plus INR70 crores for the flagship figures. It remains the same.
  • Debt Debt disclosed
    • Repayment INR195 crores in loans repaid from IPO proceeds (INR128 crores in Q4 FY25 and balance in H1 FY26), leading to lower finance costs. ₹195 Cr
    A total of INR195 crores in loans have been repaid from IPO proceeds, INR128 crores in Q4 FY '25 and the balance in H1 FY '26, leading to lower finance costs and higher profitability versus the same quarter last year.

Guidance & targets

Capex

  • FY26 Capex Capex · FY26 · High confidence INR310 crores + INR70 crores for flagship figures
    Yes, INR310 crores, plus INR70 crores for the flagship figures. It remains the same.

    — Yashwanth Venkat

Capacity

  • New Facility Openings Capacity · next 2 quarters of FY26 · High confidence 30 facilities
    Over the next 2 quarters of this financial year, we're targeting to launch another 30 facilities, which will comprise 17 in the South, 6 in the West, 4 in the North and 4 in the East.

    — Adil Agarwal

Market Share

  • Delhi-NCR Market Expansion Market Share · next 12 months · Medium confidence Significantly expand presence
    Building on this momentum, we plan to significantly expand our presence rapidly in the Delhi-NCR market over the next 12 months.

    — Adil Agarwal

Profitability

  • Premiumization Growth Profitability · next few quarters · High confidence 4.5% to 5%
    We are seeing a good amount of increase in premiumization, and that has been around 4.5% to 5% for this quarter. We hope to continue with that kind of growth over the next few quarters.

    — Adil Agarwal

  • Greenfield Secondary Facility EBITDA Margins Profitability · over a 5-year period · High confidence 30% to 32%
    So in terms of margins for Greenfield facilities for secondary facilities, we can look at margins close to about 30% to 32% at a store level over a 5-year period.

    — Yashwanth Venkat

  • Greenfield Secondary Facility Breakeven (Core Markets) Profitability · High confidence 6 to 7 months
    in core markets, they tend to breakeven at a store level by the 6 or 7 month itself.

    — Yashwanth Venkat

  • Greenfield Secondary Facility Breakeven (Blended Basis) Profitability · High confidence 12 to 15 months
    Across core and non-core markets, if you take, typically, a secondary facility will breakeven between the 12 to 15 months.

    — Yashwanth Venkat

  • H2 FY26 Overall Margins Profitability · H2 FY26 · Medium confidence similar levels as H1
    But in terms of the overall margins with the pace of expansion and with more Greenfields getting launched, the overall margins on a percentage basis should be on similar levels as to whatever we have reported on for H1, Tushar.

    — Yashwanth Venkat

Revenue

  • H2 FY26 Overall Business Performance Revenue · H2 FY26 · Medium confidence slightly stronger than H1
    See, in terms of the overall business performance, generally, H2 will be slightly stronger than H1, Tushar.

    — Yashwanth Venkat

What to watch in Q3 FY26

North Region Performance

H2 FY26
Current H1 FY26 revenue growth 14.2% YoY, impacted by rains and festivities.
Target Improved growth and recovery in H2 FY26.

Why it matters

The North region's performance was softer in H1 due to temporary factors; its recovery and contribution to overall growth in H2 will be key to meeting full-year targets.

North typically seasonally is better in the second half of the year. So, we should see improvements coming in North in the second half of the year.

Risks & concerns

  • Impact of unseasonal rains and festivities on business

    medium

    Unseasonal rains and early festivities impacted Q2 performance, particularly in the North and West regions, leading to slightly lower growth than expected.

    Management acknowledged

  • Africa business contribution decline

    low

    Africa business revenue grew 17.4% YoY, but its contribution to overall revenue declined from 10.4% in H1 FY25 to ~10% in H1 FY26.

    Management acknowledged

Q&A highlights

7 direct
Annual guidance vs. H1 performance Direct
We would be more or less in line with whatever we had guided towards at the start of the year, Binay.

Analyst questioned if strong H1 performance (20% growth) would lead to exceeding annual guidance, but management indicated they would remain 'more or less in line,' suggesting a more conservative outlook for H2 or that H1 was within expectations for the full year.

Asked by Binay from Morgan Stanley

Revenue per surgery growth and complex cataracts Direct
Cataract has been a big driver. Our cataract YTD has gone up to around 40.5 K which is driven actually largely by what Adil mentioned, Femto Cataract and high-end surgeries -- high-end cataract surgeries. They have driven us fairly strongly this quarter.

Analyst noted a sharp increase in revenue per surgery (9% YoY) despite a lower share of refractive surgeries, and management confirmed it's due to higher-value Femto Cataract and complex high-end surgeries, indicating a positive shift in service mix.

Asked by Binay from Morgan Stanley

Subsidiary financials and margin expansion Direct
A couple of things, which we have concentrated on over the last 6 months is in terms of cost efficiencies, Binay. So if you look at the profit and loss statement of our subsidiary, the one major increase which you can see is on the gross margins. For the same quarter of last year, we had gross margins of about 77.1%. The gross margins have moved to close to about 79%, one. The second point is on the doctor and employee costs.

Management attributed the margin expansion in subsidiaries to cost efficiencies, particularly improved gross margins (from 77.1% to ~79%) and controlled doctor/employee costs relative to revenue growth, highlighting operational leverage.

Asked by Binay from Morgan Stanley

North region surgery growth and scaling efforts Direct
So you're right. Actually, for North, we've had generally a tough H1. All those issues with regards to operations improved starting in Q1 to the festivities being early this Q2 quarter, and then we also had the rains, very heavy rains. So, these 3 impacted us overall from a North perspective... North typically seasonally is better in the second half of the year. So, we should see improvements coming in North in the second half of the year.

Analyst pointed out the mid-single-digit surgery growth in the North, and management explained it was due to H1 seasonality, early festivities, and heavy rains, expecting improvements in H2, indicating a temporary setback rather than a structural issue.

Asked by Tushar Manudhane from Motilal Oswal Financial Services

Performance of Jalandhar acquired unit Partial
One softer aspect is Jalandhar also, we have undertaken a complete refurbishment of the old facility, which has slightly impacted the business for about close to 3 to 4 weeks. So, we believe that once this actually is completed, we'll have a strong H2, Tushar.

Management disclosed that refurbishment at the Jalandhar facility temporarily impacted business for 3-4 weeks, providing context for its performance and indicating a stronger H2 post-completion.

Asked by Tushar Manudhane from Motilal Oswal Financial Services

Revenue per surgery growth factor and premiumization Direct
So the biggest contributor obviously comes from cataract, where we continue to see a good amount of growth. We are seeing a good amount of increase in premiumization, and that has been around 4.5% to 5% for this quarter. We hope to continue with that kind of growth over the next few quarters.

Management confirmed that premiumization, particularly in cataract surgeries, is driving revenue per surgery growth (around 4.5-5% this quarter) and is expected to continue, highlighting a key lever for future revenue expansion.

Asked by Tushar Manudhane from Motilal Oswal Financial Services

Strategy for entering Tier 2/3 cities Direct
Two, three things which we do when we expand into Tier 2, Tier 3 cities is, one is we always try to work with local ophthalmologists. We hire locally, and some of these ophthalmologists are from that particular area and they have a very strong network base in their respective markets. Second thing is we bring best-in-class technology across all our Tier 2 and Tier 3 facilities... And third, we have a very strong brand and marketing strategy...

Management outlined its successful strategy for Tier 2/3 expansion, focusing on local talent, advanced technology, and strong branding, which is crucial given that 61-62% of their facilities are already in these markets.

Asked by Param Vora from Trinetra Asset Managers

Unit economics differential between Tier 1 and Tier 2/3 facilities Direct
Our Tier 2, Tier 3 facilities are pretty much -- in terms of unit economics are pretty much on par with our facilities in the metros. There's not too much of a difference.

Management clarified that unit economics in Tier 2/3 cities are comparable to metros, dispelling potential concerns about lower profitability in smaller markets and validating their expansion strategy.

Asked by Param Vora from Trinetra Asset Managers

3 min read 7 chapters

Detailed narrative

Strong H1 FY26 Financial Performance

Dr. Agarwal's Health Care Limited achieved a significant milestone in H1 FY26, surpassing INR1,000 crores in total income for the first time, reaching INR1,007 crores, a 20.2% year-on-year increase. Revenue from operations also grew by 20.2% to INR986 crores. This robust top-line growth was accompanied by strong profitability, with IndAS EBITDA rising 24.9% to INR285 crores, and margins expanding by 100 basis points to 28.3%. PAT saw an even more impressive surge of 88.4% year-on-year to INR75 crores, with PAT margins improving by 270 basis points to 7.2%.

Q2 FY26 Performance Driven by Operational Efficiencies

For the second quarter of FY26, the company reported a total income of INR507 crores, an 18.2% increase year-on-year, and revenue from operations grew 19.7% to INR499 crores. Q2 IndAS EBITDA stood at INR144 crores, reflecting a 21.2% year-on-year growth, with margins improving by 70 basis points to 28.4%. PAT for Q2 grew 71% year-on-year to INR36 crores, with PAT margins expanding by 220 basis points to 7.2%. Management attributed these margin improvements to cost efficiencies, particularly improved gross margins (from 77.1% to ~79%) and controlled doctor/employee costs.

Aggressive Network Expansion and Diversified Footprint

In H1 FY26, Dr. Agarwal's Health Care served over 14.3 lakh patients and performed nearly 157,000 surgeries across its network of 258 facilities (29 hubs and 229 spokes). The company expanded its footprint by commissioning 24 new Greenfield facilities, with 11 added in Q2 alone. The network now comprises 239 facilities across 14 states and 5 union territories in India, covering 141 cities. The presence is well-diversified, with 31% of facilities in Tier 1 cities, 62% in other cities, and 7% internationally, demonstrating a balanced growth strategy.

Focus on Specialized Surgeries and Premiumization

The company continues to emphasize specialized surgical procedures and advanced technology. In H1 FY26, high-end cataract surgeries accounted for 25.8% of total cataract procedures, with total cataract procedures increasing 41.7% year-on-year to 29,697. Robotic cataract surgeries (Femto Cataract) grew robustly by 69% year-on-year to 2,616 procedures. Lenticular (SMILE) surgeries increased 11.5% to 2,668, and retinal surgeries rose 23% to 6,205. Management noted that premiumization, contributing 4.5-5% growth this quarter, is a key driver for revenue per surgery and is expected to continue.

Regional Performance and Strategic Market Focus

The Southern region remains the largest contributor, delivering INR635 crores in revenue (64% of total) with a strong 22.2% year-on-year growth. The West region contributed INR150 crores (15.2% of total), growing 16.6% year-on-year, despite some impact from festivities and rains. The North region, contributing 7.3% of total revenue, grew 14.2% year-on-year, experiencing a softer H1 due to unseasonal rains and early festivities, but is expected to improve in H2. The company plans significant expansion in the Delhi-NCR market over the next 12 months, reinforcing its confidence in the region's potential.

Vintage Performance and Future Expansion Plans

Mature facilities (operational for over 3 years) contributed 75% of total group revenues, growing 13.4% to INR734 crores in H1 FY26. Facilities operational prior to FY22 grew 13.9% to INR685 crores, underpinning strong same-store sales growth. The company plans to launch another 30 facilities in the next two quarters of FY26, with a focus on the South (17 facilities), West (6), North (4), and East (4). Management highlighted the successful relocation and upgrade of the Whitefield facility in Bangalore, which saw a significant improvement in performance, with average monthly revenue of INR2.1 crores and 2,700 OPD visits.

Capital Allocation and Debt Management

The company has been proactive in managing its debt, repaying INR195 crores in loans from IPO proceeds, which included INR128 crores in Q4 FY25 and the balance in H1 FY26. This debt reduction has contributed to lower finance costs and improved profitability. For FY26, the company's capital expenditure guidance remains at INR310 crores, with an additional INR70 crores allocated for flagship projects, indicating continued investment in growth and infrastructure.

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