Dr. Agarwal’s FY26: Scale, Margin Stability, and a Bigger FY27 Expansion Plan

Dr. Agarwal’s Health Care ended FY26 with a strong combination of growth and profitability, backed by rapid network expansion. On a consolidated basis, total income rose to INR 2,125 crore in FY26, up 20.9% year on year. Ind AS EBITDA increased to INR 614 crore, up 22.2%, and the EBITDA margin improved by 31 basis points to 28.9%. Profit after tax jumped to INR 168 crore, up 52.4%, with PAT margin expanding to 7.9%.

Q4 FY26 also reflected the operating leverage the company is trying to build. Total income grew 21.2% year on year to INR 577 crore, and Ind AS EBITDA came in at INR 174 crore, with an EBITDA margin of 30.2%. The company highlighted that this margin was the highest quarterly margin of the year despite 19 new facilities being opened in the quarter.

Growth built on a scaled hub-and-spoke network

The company continues to position itself as a scaled eye-care platform, using a hub-and-spoke model that combines primary facilities for access with secondary and tertiary surgical facilities for procedures. As of March 31, 2026, Dr. Agarwal’s operated 288 eye care facilities. The network expansion was predominantly greenfield, with 57 new facilities added during FY26.

Operationally, FY26 included over 30 lakh patients served and over 3.23 lakh surgeries performed. Cataract surgeries remained the largest category, while the company also called out growth in higher-end procedures such as femto cataracts and lenticular procedures.

Regional concentration remains tilted toward South India. In FY26, South contributed INR 1,273 crore of revenue (excluding outside India and certain non-operating items) and represented 61.2% contribution, with 182 facilities. West contributed INR 341 crore (16.4% contribution) with 47 facilities, North contributed INR 191 crore (9.2% contribution), and East contributed INR 61 crore (2.9% contribution).

Revenue mix: surgeries remain the engine

The investor presentation provides a revenue mix by segment for FY26, excluding other income. Surgeries continue to drive the majority of revenue, with opticals and diagnostics providing diversification.

In FY26, the segment mix was:

• Surgeries: 66.7%
• Opticals, contact lens and accessories: 11.9%
• Diagnosis, consultations, and others: 13.0%
• Eye care related pharma products: 8.4%

This mix is important because it helps explain both gross margin behavior and the sensitivity of profitability to procedure growth. It also clarifies that the business is not purely dependent on surgical revenue, though surgeries are the main driver.

Financial summary (Consolidated)

Margin drivers: lower finance costs and operating leverage, but expansion drag is real

A notable driver of FY26 profitability improvement was lower finance cost. The consolidated profit and loss statement shows finance costs declining to INR 90 crore in FY26 from INR 109 crore in FY25. In the earnings call, management attributed this to systematic repayment of INR 195 crore of loans from IPO proceeds and declining interest on deferred consideration from acquisitions.

The company also emphasized healthy cash generation relative to EBITDA. Key financial metrics in the presentation show CFO to EBITDA at 84.5% in FY26.

However, management was also direct about the cost of scaling. In the earnings call, the COO noted that the FY26 greenfield cohort produced around INR 30 crore of operating losses from a unit economics perspective during the year. The FY25 cohort loss was referenced at around INR 21 crore. This is a critical point for investors assessing the sustainability of margins while the company accelerates openings.

FY27 outlook: 60 facilities, higher surgical mix, and INR 380 to 400 crore capex guidance

The company has set out an ambitious expansion plan for FY27. Management stated it plans to commission 60 new domestic facilities, split evenly between H1 and H2. Importantly, the mix is shifting toward surgical centers: 40 surgical centers and 20 clinics.

Capex guidance was provided on the call. Management guided for an overall outflow of INR 380 crore to INR 400 crore in FY27, which includes capex for the new facilities and capex for a new CMS facility.

Management also guided acquisition-related cash outflows. The CFO indicated acquisition-related payments of around INR 60 crore to INR 65 crore in FY27, compared with around INR 85 crore in FY26.

Corporate actions and merger process update

A corporate announcement included a reallocation of unspent IPO proceeds. The company disclosed that unutilized amounts from issue-related expenses were being reallocated to general corporate purposes and unidentified inorganic acquisitions, while remaining within applicable SEBI limits for such usage.

Management also provided an update on the proposed merger of Dr. Agarwal’s Health Care Limited with Dr. Agarwal’s Eye Hospital Limited. The company stated it received stock exchange observation letters with no adverse objections in February 2026, filed the NCLT application, and that the NCLT Chennai bench has directed meetings of shareholders and creditors on July 2, 2026. Management indicated completion could take another five to six months after these meetings, subject to approvals.

Key takeaways

Dr. Agarwal’s FY26 performance shows that the company has been able to expand rapidly while keeping margins broadly stable and improving profitability through lower finance costs. The key investor debate for FY27 is likely to revolve around execution: delivering 60 domestic openings with a higher surgical mix, while managing the year-one loss drag that comes with aggressive greenfield expansion. The merger process and large capex commitments add additional milestones for the next 12 to 18 months.