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Dr. Agarwal's Health Care Limited — Q3 FY26 earnings call

Call held 4 Feb 2026

Management summary

Dr. Agarwal's Health Care Limited delivered a robust Q3 and 9M FY26 performance, marked by strong revenue and EBITDA growth, significant PAT expansion, and healthy margin improvement. The company continued its aggressive network expansion, commissioning 14 new Greenfield facilities, and saw strong growth in high-end and robotic surgeries. While the refractive segment experienced some slowdown, management expressed confidence in its operational efficiency, same-store sales growth, and ability to meet full-year guidance, despite rising employee costs and regional challenges.

Highlights

9M FY26 total income of ₹1,548 crores, up 20.8% YoY, and revenue from operations of ₹1,516 crores, up 21.2% YoY.
9M FY26 IndAS EBITDA of ₹440 crores, reflecting a 23.6% YoY growth, with margins improving by 64 bps to 28.4%.
9M FY26 Profit after tax grew 74.3% YoY to ₹118 crores, with PAT margins expanding by 234 bps to 7.6%.
Q3 FY26 revenue from operations rose 23% YoY to ₹530 crores, and EBITDA grew 21.3% YoY to ₹155 crores.
High-end cataract surgeries accounted for 43.5% of total cataract procedures in 9M FY26, with robotic cataract surgeries growing 83% YoY to 4,400 procedures.
Same-store sales growth is strong, north of 13.5%, indicating effective ramp-up of new centers and operational efficiency.

Concerns

The refractive surgery segment has been slower this year, with management hoping for a bounce back next year.
Doctor and employee costs cumulatively increased by 140 bps to 33.4% of total revenues for Q3 FY26 compared to Q3 FY25.
Unseasonal rains in core markets and the impact of festivals affected Q3 FY26 India revenue growth, though still positive at 23.1%.

Key financials

3 periods

Headline

Other Expenses (% of Revenue)
15.5%

Q3 FY26

Total Income
₹540 Cr
YoY +21.9%
Revenue from Operations
₹530 Cr
YoY +23%
IndAS EBITDA
₹155 Cr
YoY +21.3%
EBITDA Margin
28.4%
Profit After Tax
₹44 Cr
YoY +55%
PAT Margin
8.1%
Doctor and Employee Costs (% of Revenue)
33.4%

9M FY26

Total Income
₹1,548 Cr
YoY +20.8%
Revenue from Operations
₹1,516 Cr
YoY +21.2%
IndAS EBITDA
₹440 Cr
YoY +23.6%
EBITDA Margin
28.4%
Profit After Tax
₹118 Cr
YoY +74.3%
PAT Margin
7.6%
Total Surgeries
2,38,283
YoY +11.6%
Robotic Cataract Surgeries
4,400
YoY +83%
SMILE Surgeries
4,970
YoY +17.7%
Retinal Surgeries
9,437
YoY +23.2%
Corneal Transplants
792

What they filed

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

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	255	268	281	302	309 +21%	335 +25%	348 +24%	383 +27%
Expenses	198	203	208	235	240	255	256	287
EBITDA	58	65	73	67	69 +19%	80 +23%	92 +26%	96 +43%
Margin	23%	24%	26%	22%	22%	24%	26%	25%
Other income	5	10	24	12	6	6	1	3
Interest	23	23	21	19	17	18	19	19
Depreciation	38	39	42	44	48	48	56	58
Profit before tax	1	12	34	16	10 +900%	20 +67%	18 −47%	22 +38%
Tax rate	746%	37%	22%	35%	51%	31%	42%	26%
Net profit	-4	8	27	10	5 +225%	14 +75%	11 −59%	17 +70%
EPS	0.12	0.25	0.84	0.32	0.15	0.44	0.33	0.53

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

Southern Region
₹950 Cr Revenue22.4% YoY Growth63% Contribution to Group Revenue172 Facilities
West Region
₹244 Cr Revenue18.4% YoY Growth16% Contribution to Group Revenue46 Facilities
North Region
₹126 Cr Revenue19.7% YoY Growth8.3% Contribution to Group Revenue24 Facilities
Surgical Services
67% Contribution to Group Revenue
Diagnosis, Consultations, Non-Surgical Treatments
11.6% Contribution to Group Revenue
Optical Products and Pharmacy
21.5% Contribution to Group Revenue

Capital allocation

high confidence

Capex Capex disclosed

So, on CAPEX, we have done about close to Rs.275 crores, Binay, out of the Rs.310 crores which we had committed. And on the spends in the subsidiary for the Cathedral Road facility, we have done close to about Rs.35 crores out of Rs.70 crores which were committed, Binay.
Debt Debt disclosed
- Repayment Loans repaid from IPO proceeds ₹95 Cr
- Repayment Loans repaid in Q4 FY25 ₹128 Cr
- Repayment Loans repaid in YTD December 2025 ₹67 Cr
A total of INR95 crores in loans have been repaid from IPO proceeds, INR128 crores in Q4 FY25 and INR67 crores in YTD December 2025, leading to lower finance costs and higher profitability versus the same quarter last year.

Guidance & targets

Capacity

New facilities to be launched Capacity · by end of current fiscal year · High confidence 52 to 55 facilities

The goal is to end up at about 52 to 55 facilities by the end of this year.

— Dr. Adil Agarwal, Chief Executive Officer
New facilities to be launched Capacity · next quarter of this financial year · High confidence 16 centers

Over the next quarter of this financial year, we plan to launch another 16 centers, including five in the South, five in the West, and six in the North. Out of the total planned additions, 11 facilities are expected to be the surgical centers.

— Dr. Adil Agarwal, Chief Executive Officer
Annual facility additions Capacity · every year · High confidence 55-60 facilities

So, the guidance which we have given is we are looking at adding anywhere between 55-to-60 facilities every year.

— Dr. Adil Agarwal, Chief Executive Officer

Network Growth

Network size increase Network Growth · every year · High confidence about 20%

Yes, roughly the math is we are looking at increasing our network size by about 20% every year.

— Dr. Adil Agarwal, Chief Executive Officer

Profitability

Breakeven for new facilities in newer regions Profitability · after launch · High confidence 15-18 months

However, we expect the facilities to broadly breakeven around the 15 to 18 months kind of a number. That is a very broad estimate.

— Rahul Agarwal, Chief Operating Officer
Breakeven for new facilities in core markets Profitability · after launch · High confidence 6-7 months

The facilities breakeven at a store level within six to seven months.

— Rahul Agarwal, Chief Operating Officer
Blended breakeven for all new facilities Profitability · after launch · High confidence within 12th month

So, on a blended basis, all our facilities will breakeven within the 12th month kind of a mark.

— Rahul Agarwal, Chief Operating Officer

Capex

CAPEX for surgical secondary facility Capex · per facility · High confidence ₹5.5-6 crores

For the surgical secondary facility, the CAPEX ranges between Rs.5.5 to 6 crores

— Dr. Adil Agarwal, Chief Executive Officer
CAPEX for tertiary facility Capex · per facility · High confidence ₹11-12 crores

for tertiary facility, generally the CAPEX ranges close to Rs.11 to 12 crores

— Dr. Adil Agarwal, Chief Executive Officer
CAPEX for primary facility Capex · per facility · High confidence ₹35 lakhs

and for a primary facility, the CAPEX is close to about 35 lakhs.

— Dr. Adil Agarwal, Chief Executive Officer

Capacity Mix

Ratio of surgical to primary centers in additions Capacity Mix · general split · Medium confidence 75% surgical, 25% primary

So, if you see a usual split, will be about 75% will be surgical, 25% will be primary centers.

— Yashwanth Venkat, Chief Financial Officer

Merger

Merger process completion Merger · Q3, Q4 of 2027 · High confidence Q3, Q4 of 2027

So, I think we expect the entire merger process to be completed by Q3, Q4 of 2027.

— Rahul Agarwal, Chief Operating Officer

Facility Completion

Subsidiary facility (Cathedral Road) completion Facility Completion · Q2 FY2027 · High confidence Q2 FY2027

So, the estimate on that facility is we are expecting to complete everything and get all our licenses and approvals by Q2 of FY2027.

— Rahul Agarwal, Chief Operating Officer

Operating Cash Flow

Operating cash flow Operating Cash Flow · average for last three years · High confidence close to 80%

See, operating cash flow is close to about 80%, which has been our average for the last three years.

— Yashwanth Venkat, Chief Financial Officer

What to watch in Q4 FY26

New facility launches

next quarter (Q4 FY26)

Current 38 new facilities added YTD Dec 2025

Target 16 new centers launched (5 South, 5 West, 6 North)

Why it matters

Indicates progress towards annual facility addition targets and continued network expansion.

Over the next quarter of this financial year, we plan to launch another 16 centers, including five in the South, five in the West, and six in the North. Out of the total planned additions, 11 facilities are expected to be the surgical centers.

Risks & concerns

Slowdown in refractive surgery segment
medium

The overall industry for refractive surgery has been slightly slow this year, with management hoping for a bounce back next year.

Management acknowledged
Increased doctor and employee costs
medium

Doctor and employee costs cumulatively increased by 140 bps to 33.4% of total revenues for Q3 FY26 compared to Q3 FY25.

Management acknowledged
Impact of unseasonal rains and festivals on India revenue
low

Unseasonal rains in core markets and the impact of festivals affected Q3 FY26 India revenue growth, though it still grew 23.1%.

Management acknowledged
Impact of New Labor Codes
low

Management stated that existing salary structures and employee benefits are broadly aligned, and the incremental impact is not material currently, but they will continue to monitor.

Management downplayed

Q&A highlights

5 direct, 1 evasive

Cataract vs. Refractive Surgery Growth Trends Direct

Actually, cataract has been quite strong this quarter; we have grown by almost 18.5%. So, as I was saying, our cataract for this quarter has been stronger at 18.5% growth. In fact, refractive has been slower for us this quarter and largely for this year. It is more to do with the overall industry being slightly slow on the refractive side this year. Hopefully, we will bounce back on refractive next year.

Analyst questioned the perceived slowdown in cataract growth and rise in refractive, prompting management to clarify strong cataract growth (18.5% value, 13.7% number) and acknowledge a temporary slowdown in refractive surgery for the year.

Asked by Binay Singh

Revenue per facility and new geography strategy Partial

See, when you are calculating the revenue per facility, you have to break it down into surgical as well as primary. For example, I think you are using the Slide #12 on the investor deck while calculating the revenue per facility. So, in terms of the actual revenue per surgical facility has grown at a healthy CAGR of about 14% to 15% over the last four years.

Analyst observed a drop in revenue per facility across regions and questioned the strategy for new geographies, leading management to clarify the calculation methodology and state that surgical facility revenue has grown at a healthy CAGR of 14-15% over four years.

Asked by Nikhil

High margins of Thind subsidiary and expansion in Punjab Direct

See, Thind is a unique case, where bulk of the revenue comes from a single facility based out of Jalandhar. There are no further major costs as far as the regional resources and corporate resources are concerned. As I was explaining, Thind, the majority of the revenue comes from a single facility, and there are no costs as far as the regional resources are concerned, and very minimal costs as far as corporate is concerned. Our subsidiary, AEHL, which is predominantly consists of mature facilities and operating out of Tamil Nadu, there also the margins are close to about 33% as far as the corporate margins are concerned.

Analyst questioned the significantly higher margins of the Thind subsidiary compared to others, prompting management to explain it's due to a single-facility model with minimal regional/corporate overheads, and confirm ongoing expansion under the Thind banner.

Asked by Nikhil

Greenfield losses and corresponding revenue Evasive

We do not have that exact number right now. On a separate call, we can share some of those numbers with you.

Analyst asked for the specific revenue corresponding to the ₹28.5 crores in cumulative Greenfield losses, which management could not provide immediately, indicating a lack of granular data readily available for investor queries.

Asked by Prateek

Split of same-store growth between price and volume Direct

On the overall 13%, we have a volume growth, which is half of it, close to 6.5% and the value growth, which is 6.5%. In this 6.5% of value growth, we have both price hike and premiumization. Large part of the value growth is coming from premiumization, which I already spoke about; almost close to 5% has come in from premiumization.

Analyst sought a breakdown of the 13% same-store growth, and management provided a detailed split: 6.5% from volume and 6.5% from value, with premiumization contributing significantly to the value growth.

Asked by Kartick Bane

Robotic surgery: ownership model and capacity utilization Direct

All the machines which we have are all fully owned by the Company and they are not leased out, just to clarify. Most of our hubs across major cities now have a robotic cataract surgery machine.

Analyst inquired about the ownership model (lease vs. buy) of robotic surgery machines and their capacity utilization, to which management confirmed outright ownership and clarified that the 60 surgeries per month mentioned was for a specific new facility, not an overall average.

Asked by Kartick Bane

Merger update and timeline for subsidiary facility Direct

So, quickly on the merger update, right now, we have filed for a no-objection certificate from the stock exchanges. We expect receiving this no-objection certificate from the stock exchanges very shortly. Following this, we will proceed to the National Company Law Tribunal (NCLT) to convene meetings for our shareholders and creditors. We expect these meetings to occur around two to three months post the receivement of the NOC from stock exchanges. ... So, I think we expect the entire merger process to be completed by Q3, Q4 of 2027. ... So, the estimate on that facility is we are expecting to complete everything and get all our licenses and approvals by Q2 of FY2027.

Analyst sought an update on the merger process and the timeline for a large facility in the subsidiary, receiving specific timelines for regulatory approvals and completion of both the merger and the facility.

Asked by Dishant Jain

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Detailed narrative

Q3 & 9M FY26 Financial Performance Overview

Dr. Agarwal's Health Care Limited reported a strong Q3 and 9M FY26. For the nine months ended December 2025, total income reached ₹1,548 crores, a 20.8% year-on-year increase, with revenue from operations rising 21.2% to ₹1,516 crores. IndAS EBITDA for 9M FY26 was ₹440 crores, growing 23.6% YoY, and margins improved by 64 basis points to 28.4%. Profit after tax for the nine months grew 74.3% YoY to ₹118 crores, with PAT margins expanding to 7.6%. Q3 FY26 alone saw total income of ₹540 crores (up 21.9% YoY) and revenue from operations of ₹530 crores (up 23% YoY), delivering an EBITDA of ₹155 crores (up 21.3% YoY) with 28.4% margins.

Footprint and Network Expansion

The company continued its aggressive expansion, commissioning 14 new Greenfield facilities during Q3 FY26, including nine secondary centers. This brings the total network to 253 facilities across 14 states and five union territories, covering 148 cities. Management highlighted that the ramp-up of recently launched facilities has been faster than in earlier phases, supported by strengthening brand equity. The goal is to add 52 to 55 facilities by the end of the current fiscal year, with plans to launch another 16 centers in the next quarter, including 11 surgical centers. The company aims to increase its network size by about 20% annually, targeting 55-60 new facilities each year.

Clinical Excellence and Complex Surgeries Growth

Dr. Agarwal's demonstrated strong growth in complex surgeries. For the nine months ended December 2025, high-end cataract surgeries constituted 43.5% of total cataract procedures, totaling 45,459 surgeries, an increase of 43.5% over the previous year. Robotic cataract surgeries (Femto cataract) saw a robust 83% year-on-year growth, rising from 2,616 to 4,400 procedures. Lenticular (SMILE) surgeries increased 17.7% YoY to 4,970, and retinal surgeries grew 23.2% to 9,437. The company also performed 792 corneal transplants during this period, emphasizing its investment in cutting-edge technology and advanced surgical capabilities.

Regional Performance and Vintage Analysis

The Southern region remains the largest market, contributing 63% of total group revenues with ₹950 crores, growing 22.4% YoY. The West region contributed 16% of revenues with ₹244 crores, up 18.4% YoY, while the North region contributed 8.3% with ₹126 crores, up 19.7% YoY. Operations in the Delhi NCR region have commenced strongly, with a secondary facility in Gurgaon launched in November 2025. Facilities operational prior to FY22 contributed ₹1,025 crores, growing 14.2% YoY, while FY23 and FY24 vintage centers generated ₹187 crores (14.3% growth) and ₹124 crores (18% growth) respectively, indicating strong ramp-up and same-store sales growth of over 13.5%.

Operational Metrics and Payer Mix

Surgical services continue to be the primary revenue driver, contributing 67% to the group's total revenue. Diagnosis, consultations, and other non-surgical treatments accounted for 11.6%, while optical products and pharmacy items made up 21.5%. The payer mix for YTD December 2025 was 62.4% cash, 28.5% insurance and TPA, and 9.1% government schemes. Domestically, the mix was 70.9% cash, 22.9% insurance/TPA, and 6.3% government schemes. Gross margins remained stable year-on-year, with high-end cataract procedures increasing to 26.6% of total in YTD December 2025 from 24.6% in FY25.

Capital Allocation and Greenfield Investments

The company has made significant capital expenditures, with approximately ₹275 crores spent YTD out of ₹310 crores committed. This includes ₹35 crores out of ₹70 crores committed for the Cathedral Road facility. Cumulative Greenfield losses for branches launched over the last three years amounted to ₹28.5 crores, though FY24 and FY25 vintage centers are now profitable. The company has also actively managed its debt, repaying ₹95 crores from IPO proceeds, ₹128 crores in Q4 FY25, and ₹67 crores in YTD December 2025, leading to lower finance costs and improved profitability.

Merger Update and Future Outlook

The company has filed for a no-objection certificate from stock exchanges for the merger and expects to receive it shortly, followed by NCLT proceedings. The entire merger process is anticipated to be completed by Q3 or Q4 of 2027. The large facility in the subsidiary is expected to be completed with all licenses and approvals by Q2 FY2027. Management is also exploring the Ethiopian market, viewing it as a high-potential opportunity due to its steady patient base and respect for Indian doctors, with a feasibility study currently underway to determine CAPEX spend and projections.

This is an AI-generated summary of a publicly available earnings call transcript.

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