Anand Kumar/AI-Generated Image
Summary: Paras Healthcare was in the red in FY25. Now its IPO asks for a price that looks past last year's earnings altogether. The bet rests on hospitals still finding their feet and on payers who set their own rates. Some numbers make the case. A few sit where most investors won't look.
Paras is raising Rs 1,450 crore: Rs 500 crore through a fresh issue and Rs 950 crore through an offer for sale. The issue is open from October 21 to 23, 2026. Rs 375 crore of the fresh issue will repay debt; the rest is for general corporate purposes.
Who is selling
Promoter Dr. Dharminder Kumar Nagar’s 72.8 per cent stake will fall to about 64 per cent at the upper end of the price band. The bigger seller is Commelina, an investor since 2017, selling more than half its holding at about six times its average cost. In April 2025, shares changed hands at Rs 237, a third of the IPO price.
What Paras does
Paras runs eight hospitals with 2,211 beds: five in North India and three in Patna, Darbhanga and Ranchi. Gurugram, the flagship, brings in about a third of revenue. Government schemes and public-sector employers paid for 41 per cent of FY26 revenue. They fill beds but pay fixed rates, and slowly. Six of the eight hospitals are leased, keeping upfront costs low but making rent a fixed bill.
Financial summary
| Particulars (Rs crore) | FY24 | FY25 | FY26 |
|---|---|---|---|
| Revenue from operations | 1,129 | 1,294 | 1,606 |
| Adjusted EBIT | 62 | 11 | 169 |
| Net profit | -15 | -58 | 44 |
| Cash from operations | 92 | 86 | 164 |
| Adjusted EBIT is EBIT plus the depreciation charged on leased assets, minus the lease payments | |||
Returns and leverage
| Particulars | FY24 | FY25 | FY26 |
|---|---|---|---|
| Revenue growth (%) | - | 14.6 | 24.1 |
| Adjusted EBIT margin (%) | 5.5 | 0.8 | 10.5 |
| Adjusted ROCE (%) | 7.1 | 1.1 | 13.6 |
| Adjusted debt to equity (times) | 1.6 | 2.6 | 2.2 |
| Adjusted items exclude lease liabilities from debt and capital employed, and count actual lease payments in EBIT. | |||
Operating KPIs
| Particulars | FY24 | FY25 | FY26 |
|---|---|---|---|
| Total bed capacity | 2,135 | 2,135 | 2,211 |
| Operational beds | 1,332 | 1,465 | 1,502 |
| Occupancy (%) | 52.5 | 50.8 | 61.8 |
| Occupied bed days | 2,54,716 | 2,68,927 | 3,38,321 |
| ARPOB (Rs) | 44,306 | 48,089 | 47,398 |
| ALOS (Average length of stay) (days) | 3.1 | 2.9 | 2.9 |
| Occupancy is measured on operational beds. ARPOB is average revenue per occupied bed per day. | |||
In FY25, opening and filling two new hospitals ate nearly all the revenue growth, and Paras lost Rs 58 crore. FY26 was the turnaround. The growth came almost entirely from filling beds, not from higher ARPOB. Part of the jump came from Paras bringing radiology in-house instead of outsourcing it, which nearly halved its outsourcing costs in FY26, a saving that won’t repeat. Q1 FY27 alone brought Rs 50 crore of net profit.
How Paras compares (FY26)
| Particulars | Paras Healthcare | Global Health | Jupiter Life Line | Yatharth Hospital and Trauma Care |
|---|---|---|---|---|
| Operational beds | 1,502 | 2,737 | 1,052 | 1,645 |
| Occupancy (%) | 61.8 | 61.6 | 61.2 | 68 |
| ARPOB (Rs) | 47,398 | 66,550 | 67,700 | 33,124 |
| ALOS (days) | 2.9 | 3 | 3.9 | 4.2 |
Look inside the hospital network
Paras’s hospitals earn more as they age. Operating EBITDA, the profit a hospital makes from treating patients before depreciation, interest and tax, shows how. In FY24, the mature hospitals kept 18 paise of every rupee of revenue as operating profit; by FY26, they kept 26 paise. The emerging pair, Ranchi and Udaipur, went from under five paise to 15 paise. The two new hospitals, Srinagar and Kanpur, went from losing 86 paise on every rupee to losing under nine paise, and turned an operating profit in the June 2026 quarter.
Mature hospitals keep about 26 paise of operating profit per rupee of revenue, emerging ones 15 paise, and new ones turned an operating profit in the June 2026 quarter.
But the core is nearing its limits. Gurugram ran at 89 per cent occupancy in Q1 FY27, and mature-hospital revenue grew just 9 per cent. Growth must now come from younger hospitals, often through government-scheme patients who fill beds at lower rates.
The strengths worth highlighting
1. Specialised care. Six specialties, grouped as CONGOR (cardiac, oncology, neuro, gastro, orthopaedics and renal), brought in 74.7 per cent of FY26 revenue, with none above 25 per cent.
2. Improving newer hospitals. Losses at new hospitals have nearly closed, and emerging hospitals’ margins tripled in two years.
3. Room to grow. Filling beds has paid off: between FY24 and FY26, adjusted EBIT rose Rs 107 crore on Rs 364 crore of extra capital, a return of about 29 per cent. New hospitals in Gurugram and Ludhiana will take capacity to about 3,000 beds by FY28.
Risks investors should know
1. Dependence on government payers. They set the rates, can suspend a hospital’s empanelment, as has happened at Paras before, and pay slowly. Receivable days rose from 46 to 66 in two years, and cash from operations now covers only about half of operating EBITDA.
2. People. Staff attrition has run at 60-67 per cent a year for three years. Where patients follow doctors, losing specialists hurts revenue and reputation.
3. Debt and leases. After the IPO, Paras will still owe lenders over Rs 500 crore and carry a similar amount in lease liabilities. Two loss-making subsidiaries also owe the parent Rs 407 crore, none of it repaid.
What lies ahead
Paras has two routes to growth. The cheaper one is opening the third of its beds already built, which needs doctors and nurses more than money. The costlier one is new leased hospitals in Gurugram and Ludhiana, where rent starts before revenue, and Gurugram’s building was still under construction in June 2026. Paras’s newest hospitals took about three years to turn an operating profit.
Our verdict
At Rs 693, Paras is valued at Rs 7,498 crore, about 171 times its FY26 profit of Rs 44 crore. Investors are paying not for last year’s earnings but for what the younger hospitals could earn once they mature.
The mature hospitals earn well, the newer ones are improving fast and much of the capacity is already built. Paras’s oldest hospitals show what the network can earn. The price is a bet that the rest get there, and occupancy and collections at the younger hospitals will show first whether it pays off.
Also read: Fortis vs Aster: Two hospital chains, two growth bets
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
