💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue from operations grew 28.5% YoY to INR 1,711 Cr in FY25. In H1 FY26, revenue reached INR 986 Cr, a 20.1% increase YoY. Mature facilities contributed 74.6% of H1 FY26 revenue, while emerging facilities (less than 3 years old) grew to represent 25.4% of revenue. Surgeries remain the dominant segment, contributing 65% of total FY25 revenues.

Geographic Revenue Split

India operations accounted for 89.8% of revenue in H1 FY26 (INR 885.4 Cr), while international operations (primarily Africa) contributed 10.2% (INR 100.6 Cr). The company has significantly expanded its non-South Indian presence, with 31% of centers located in these markets as of September 2025, up from 16% in March 2022.

Profitability Margins

Gross margins improved to 78.7% in Q2 FY26 from 78.0% in Q2 FY25. Net Profit Margin stood at 7.2% in Q2 FY26, a significant increase from 5.0% in the previous year. The listed subsidiary (AEHL) saw PBT margins move from 18.3% to 21.7% due to cost efficiencies in doctor and employee expenses.

EBITDA Margin

Consolidated EBITDA margin was 28.3% in H1 FY26 (INR 285 Cr), up from 27.3% in H1 FY25. This 100 bps improvement was driven by a 24.9% YoY growth in EBITDA and better absorption of fixed costs in emerging facilities. Operating EBITDA for the subsidiary AEHL reached 35.0% in Q2 FY26.

Capital Expenditure

The company added 24 new facilities in H1 FY26 (13 in Q1 and 11 in Q2), bringing the total center count to 258 as of September 30, 2025, compared to 180 in March 2024. While specific future INR Cr capex is not detailed, the rapid expansion from 180 to 258 centers indicates heavy investment in greenfield and brownfield sites.

Credit Rating & Borrowing

The company maintains a healthy financial risk profile with an interest coverage ratio of 6.04 times in H1 FY26. External borrowings were reduced to INR 246.9 Cr following the February 2025 IPO, down from INR 387.8 Cr in FY24. Total outside liabilities to tangible networth (TOL/TNW) stood at 0.94 times as of September 2025.

⚙️ Operational Drivers

Raw Materials

Cost of Goods Sold (COGS), which includes surgical lenses, medical consumables, and pharmacy stock, represents 21.3% of total revenue as of Q2 FY26.

Import Sources

Not specifically disclosed in available documents, though the company utilizes advanced global technologies like FEMTO Cataract and SMILE for refractive surgeries.

Capacity Expansion

Current capacity stands at 258 centers as of September 30, 2025. The company expanded from 180 centers in March 2024, representing a 43% increase in facility footprint within 18 months.

Raw Material Costs

COGS grew 14.6% YoY to INR 108 Cr in Q2 FY26, which was lower than the 19.7% revenue growth, leading to gross margin expansion. Procurement strategies focus on increasing the adoption of premium lenses to improve yield per patient.

Manufacturing Efficiency

Surgical volume grew by 8% in Q2 FY26, while value growth contributed 4.8%. Revenue per surgery increased by 9% YoY, driven by a shift toward complex cataracts and premium lens adoption.

📈 Strategic Growth

Expected Growth Rate

20%

Growth Strategy

Growth is driven by a mix of same-store sales growth (exemplified by 42% top-line growth in Telangana) and aggressive network expansion (78 centers added since March 2024). The company targets the shift from unorganized to organized eye care, leveraging its 25% market share in the organized segment and acquiring high-margin clinics like Dr. Thind (40% EBITDA).

Products & Services

Comprehensive eye care services including Cataract surgeries (largest segment), Refractive surgeries (SMILE, FEMTO), and specialized treatments for retinal and corneal diseases.

Brand Portfolio

Dr. Agarwal's Eye Hospital, Dr. Thind Eye Care, Aditya Jyot Eye Hospital.

New Products/Services

Increased adoption of premium intraocular lenses and advanced refractive technologies (SMILE/FEMTO) are expected to continue driving the 4.8% value growth component of revenue.

Market Expansion

Expansion is focused on non-South Indian markets, which now comprise 31% of the network. Recent growth includes 4 new facilities in Telangana and entry into North Indian markets.

Market Share & Ranking

Estimated 25% market share of the organized eye care segment in India.

Strategic Alliances

The group consolidates several entities including Orbit Healthcare Services (Mauritius), Elisar Life Science, and Aditya Jyot Eye Hospital.

🌍 External Factors

Industry Trends

The industry is seeing a structural shift from unorganized standalone clinics to organized chains. Consumer preference is moving toward advanced surgical techniques and premium lenses, supporting a 38% revenue CAGR for the company from FY21-25.

Competitive Landscape

Key competition arises from other corporate hospital chains and a high density of single-doctor standalone clinics which may offer lower pricing.

Competitive Moat

The moat is built on a strong brand recall, a large pool of 881 doctors, and a 25% share of the organized market. This is sustained by providing doctors with state-of-the-art technology and incentives that exceed individual practice benefits, creating high switching costs for medical talent.

Macro Economic Sensitivity

Revenue growth in Q2 FY26 was slightly tempered by unseasonal rains in core markets and festival timing, though the company still achieved 19.8% growth in India.

Consumer Behavior

Increasing demand for refractive error correction (SMILE/FEMTO) and premium cataract solutions among the aging population and urban consumers.

Geopolitical Risks

Exposure to African markets (10.2% of revenue) introduces regional economic and political risks, though Africa revenue grew 17.4% in H1 FY26.

⚖️ Regulatory & Governance

Industry Regulations

The group operates in a highly regulated healthcare industry requiring multiple government approvals for facility operations and medical standards. Compliance is monitored by an Audit Committee and independent internal audits.

Taxation Policy Impact

Effective tax rate for Q2 FY26 was approximately 31.5% (INR 17 Cr tax on INR 54 Cr PBT).

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the ability to attract and retain skilled ophthalmologists in a supply-constrained market; failure to do so would directly impact the 65% revenue contribution from surgeries.

Geographic Concentration Risk

While diversifying, the company still has a high concentration in South India (Tamil Nadu and Telangana), making it sensitive to regional weather patterns (e.g., unseasonal rains) and local competition.

Third Party Dependencies

Dependency on insurance providers and TPAs for 29.6% of revenue, making the company sensitive to changes in reimbursement rates or approval timelines.

Technology Obsolescence Risk

High risk if the company fails to continuously invest in the latest ophthalmic equipment (like FEMTO/SMILE), as technology is a key differentiator against standalone clinics.

Credit & Counterparty Risk

Receivables quality is high with a turnover ratio of 15.53; however, government payors (8.5% of mix) typically have longer payment cycles than cash/insurance segments.