Paras Health’s New Hospitals Stayed Loss-Making in Fiscal 2026

Paras Health’s Srinagar and Kanpur facilities remained loss-making for the full Fiscal 2026, recording operating EBITDA of negative Rs 12.725 crore even as New Hospitals revenue rose 107.95% to Rs 143.809 crore. The category generated positive operating EBITDA of Rs 9.798 crore in the three months ended June 30, 2026.

Why are Paras Health’s new hospitals still an operating risk?

Paras Health’s new hospitals remain an operating risk because their revenue growth had not produced a full-year operating profit by March 31, 2026. Operating EBITDA, defined by Paras Health as profit or loss before tax plus finance costs and depreciation and amortisation expense, less fair-value gain on financial instruments and other income, was negative Rs 12.725 crore for New Hospitals in Fiscal 2026.

The Fiscal 2026 loss was lower than the negative Rs 64.456 crore recorded in Fiscal 2025 and negative Rs 30.089 crore in Fiscal 2024. The direction of change shows an improving operating result, but the Fiscal 2026 figure means the category had not reached annual operating break-even at the end of the financial year.

The exposure is concentrated in two facilities classified as New Hospitals: the Srinagar hospital, which commenced operations in June 2023, and the Kanpur hospital, which started generating revenue in April 2024. Their shorter operating histories mean that patient volumes, occupancy, specialty mix and staffing must rise enough to cover the costs of operating the facilities.

What changed at Paras Health’s new hospitals in Fiscal 2026?

Paras Health’s New Hospitals cut their annual operating loss in Fiscal 2026 as revenue increased by Rs 74.652 crore from Fiscal 2025. Revenue rose from Rs 69.157 crore in Fiscal 2025 to Rs 143.809 crore in Fiscal 2026, a disclosed increase of 107.95%, while operating EBITDA improved by Rs 51.731 crore.

Paras Health does not allocate the Fiscal 2026 improvement between Srinagar and Kanpur. The reported category result therefore establishes that the two hospitals collectively improved, but does not show whether both facilities contributed equally to the reduction in the operating loss.

The comparison with Emerging Hospitals illustrates the difference between the two disclosed hospital categories in Fiscal 2026. Emerging Hospitals generated Rs 282.648 crore of revenue and Rs 42.140 crore of operating EBITDA, compared with Rs 143.809 crore of revenue and negative Rs 12.725 crore of operating EBITDA for New Hospitals.

The three months ended June 30, 2026 produced a different, partial-period outcome. New Hospitals recorded revenue of Rs 64.015 crore, up from Rs 24.567 crore in the three months ended June 30, 2025, while operating EBITDA turned positive at Rs 9.798 crore from negative Rs 9.881 crore. For that quarterly result to translate into an annual operating profit, positive operating EBITDA would need to continue through subsequent quarters.

Why did Srinagar and Kanpur take longer to begin operating?

Paras Health attributes the delayed starts at Srinagar and Kanpur to approvals, despite construction being completed within anticipated stages. Srinagar was initially planned to begin operations in April 2022 but commenced in June 2023, a delay of 14 months caused by delays in receiving required approvals.

Kanpur was initially planned to begin operations in April 2023 but started generating revenue in April 2024, a delay of 12 months. Paras Health states that the Kanpur delay arose because the lessor’s required approvals were delayed.

The timing matters because a hospital cannot generate patient revenue or build utilisation before commencing operations. Paras Health states that new hospitals may have lower initial occupancy, slower-than-expected ramp-up and lower utilisation levels than anticipated, which can delay the achievement of operating capacity and returns on investment.

The Ranchi hospital provides an earlier example of this development risk. Ranchi was planned to commence operations in April 2019 but began in September 2019 after a delay in executing its lease agreement prevented applications for relevant approvals; the subsidiary received Rs 2.75 crore of liquidated-damages notices from Heavy Engineering Corporation Limited under an agreement dated January 16, 2018.

What must happen for Paras Health’s expansion to deliver returns?

Paras Health must convert planned capacity into operational beds, occupied bed days and recurring patient volumes without further delays for its expansion plan to deliver the returns it anticipates. As of June 30, 2026, Paras Health had total bed capacity of 2,211 beds and 1,502 operational beds, meaning 67.93% of planned capacity was fully functional for in-patient midnight occupancy.

Total bed capacity refers to the number of beds for which civil structure has been planned, while operational beds are functional in-patient beds available for midnight occupancy. Paras Health states that increasing either total capacity or operational beds does not automatically increase occupied bed days, revenue or EBITDA because newly operationalised beds may require time to build utilisation.

Paras Health’s disclosed plan is to increase bed capacity to 3,011 beds by March 31, 2028 from 2,211 beds as of June 30, 2026. The plan includes a 300-bed Gurugram II hospital intended for launch by Fiscal 2027 and a Ludhiana hospital with capacity of up to 500 beds intended for launch by Fiscal 2028.

The Gurugram II lease, entered in April 2024, has a term of 29 years and 11 months and an option for a further 15-year renewal on mutually agreed terms. The Ludhiana lease, dated November 8, 2024, has a 30-year term and an option for a further 10-year renewal, while Paras Health had made an initial Rs 0.50 crore payment toward the required Rs 2.80 crore Ludhiana security deposit.

The expansion outcome depends on more than bed additions. Paras Health identifies financing availability, recruitment and retention of doctors and nurses, timely commissioning of critical equipment, integration of technology and internal controls, and legal or regulatory matters as factors that could affect new-hospital development and operating performance.

Conclusion

Paras Health’s Fiscal 2026 disclosure shows that Srinagar and Kanpur were ramping up but had not reached full-year operating profitability. New Hospitals more than doubled revenue to Rs 143.809 crore and produced positive operating EBITDA in the three months ended June 30, 2026, yet their Fiscal 2026 operating EBITDA remained negative Rs 12.725 crore.

The next measure to watch is whether quarterly positive operating EBITDA continues while Paras Health pursues its plan to expand from 2,211 beds as of June 30, 2026 to 3,011 beds by March 31, 2028. The unresolved issue is whether approvals, staffing, equipment commissioning and patient utilisation can develop on schedule, given the disclosed 14-month Srinagar delay and 12-month Kanpur delay.