The Indian healthcare sector has experienced a significant surge in profit, with a 29% rise in profit after tax (PAT) in the fiscal year 2025. This makes it the second-fastest growing sector in the country, surpassed only by the non-ferrous metals sector. The impressive growth of the healthcare sector has caught the attention of top private equity (PE) and venture capital funds worldwide, which are now competing to invest in this rapidly expanding market.
Over the past five years, the healthcare sector has received a substantial $13 billion in PE funding, accounting for 8-9% of the total PE activity in India. This represents a significant increase from 2018, when the sector accounted for only 2% of the total PE activity. The influx of investments has contributed to the sector’s remarkable growth, with major players such as Sun Pharma and Apollo Hospitals reporting substantial profits.
Sun Pharma, for instance, has reported a billion-dollar-plus PAT, while Apollo Hospitals has seen growing margins. The healthcare sector has emerged as a vital profit engine for India Inc., with its growth outpacing many other sectors. The sector’s attractiveness to investors can be attributed to India’s large and growing population, increasing healthcare needs, and the government’s efforts to improve healthcare infrastructure and services.
The significant investment in the healthcare sector is expected to continue, driven by the growing demand for quality healthcare services and the government’s initiatives to promote the sector. As the sector continues to expand, it is likely to attract more investments from PE and venture capital funds, further driving growth and profitability. With its impressive growth trajectory, the Indian healthcare sector is poised to remain a key driver of the country’s economic growth and a major destination for investments in the coming years.