Detailed Rationale

Crisil Ratings has upgraded its rating on the long-term bank facilities of Dr. Agarwals Eye Hospital Limited (DAEHL; part of Dr. Agarwal group) to ‘Crisil AA-/Stable’ from ‘Crisil A+/Positive’

 

The rating upgrade reflects sustained improvement in the business and financial performance of Dr. Agarwal group over the years. The group’s revenue grew at a compound annual growth rate (CAGR) of 35% over the three years through fiscal 2025 to Rs 1,711 crore. Moreover, in the first half of the current fiscal, the group reported revenue of Rs 986 crore, indicating a strong and sustained growth trajectory. The revenue growth comes from consistent addition of centres, both greenfield and through acquisitions. Moreover, from segmental perspective, an increase in the share of surgeries aids the growth and sustenance of healthy profitability. As on September 30, 2025, the total number of centres for the group stood at around 258 compared with 180 centres as of March 2024. The group has also improved its geographical mix over the years, with around 31% of its centres located in non-south Indian markets as on September 30, 2025, up from 16% as of March 2022, thereby enhancing its pan-India presence. Despite steady centre additions, the company's operating margin (OPBDIT) has remained stable at 26–28% over the last four fiscals, ending fiscal 2025 and in the first half of fiscal 2026, supported by sustained revenue growth and earnings from mature facilities and ramp up in emerging facilities.

 

A strong business performance also supports a healthy financial risk profile. Networth was approximately Rs 1,871 crore as on September 30, 2025 (Rs 2,019 crore before adjusting for amortisation of goodwill). Debt protection metrics remain comfortable, with an interest coverage ratio of 6.04 times in the first half of fiscal 2026 and expected to sustain in the medium term. As on September 30, 2025, the total outside liabilities (including lease liability) to tangible networth (TOLTNW) ratio stood healthy at 0.94 time. With no major, debt-funded capital expenditure additions expected over the medium term, leverage and debt protection metrics are expected to sustain, which remain monitorable. The company's liquidity is also healthy, with free cash and liquid assets of approximately Rs 454 crore as on September 30, 2025.

 

The rating also reflects the Dr. Agarwal group’s dominant position in the Indian eye care chains with a strong brand recall, experienced and professional management team. The rating also factors in a healthy financial risk profile with high networth, comfortable leverage and healthy debt protection metrics. These strengths are partially offset by competition from other hospitals and standalone clinics and dependence on scarcely available medical professionals and exposure to risks related to ramp-up and stabilisation of operations in newly added centres.

Analytical Approach
For arriving at DAEHL’s rating, Crisil Ratings has applied its parent notch-up framework for notching up the ratings for support received from its parents, Dr. Agarwals Health Care Limited (DAHCL). Debt includes lease liabilities, following adoption of Ind AS 116.

Key Rating Drivers - Strengths 

Dr. Agarwal group’s dominant position in the Indian eye care chains with a strong brand recall and professional promoters: Dr. Agarwal group has a strong presence in the eye care industry and operates under the brand Dr. Agarwal's Eye Hospital. With three generations of the promoter family who are also medical professional involved in comprehensive eye care services, Dr. Agarwal group has established themselves as the largest eye care service chain in India with a market share of more than 25%. As on September 30, 2025, the Dr. Agarwal group has 258 eye care facilities in India, spanning across 14 states and five union territories, and 19 facilities spread across nine countries in Africa. The group provides a comprehensive range of eye care services and products, including cataract surgeries, refractive treatments, and other services such as consultations, clinical investigations, and non-surgical treatments, as well as optical and eye care-related pharmaceutical products. This has led to an increase in the number of patients served, with approximately 2.4 million patients served in fiscal 2025, compared with 1.6 million in fiscal 2023. They have served around 1.4 million patients in the first half of this fiscal. The group's established market position and strong brand recall in the market are expected to continue to support its business risk profile.

 

Healthy financial risk profile with high networth and comfortable leverage: The group’s adjusted networth is Rs 1,871 crore as on September 30, 2025 (Rs 2,019 crore before adjusting for amortisation of goodwill) against Rs 1,334 (after adjusting for amortisation of goodwill) as on March 31, 2024, with a healthy gearing of 0.52 time as on September 31, 2025, against 0.72 time as on March 31, 2024, with reduction of gross debt and improved networth. This is supported by capital infusions over the years and the initial public offering (IPO) of DAHCL in February 2025, where they raised Rs 300 crore as a fresh issue. As on September 30, 2025, the TOLTNW ratio stood healthy at 0.94 time against 1.03 times as on March 31, 2024. An increase in networth and improvement in the capital structure is expected with healthy accretion to reserve backed by sustained profitability and no huge, debt-funded capital expenditure or huge acquisitions. As on September 30, 2025, the group was in net debt negative position (excluding lease liabilities) with cash and equivalents of around Rs 454 crore against term debt of around Rs 175 crore.

Key Rating Drivers - Weaknesses 

Competition from other hospitals and other standalone clinics, risks related to attraction and retention of talent and presence in a regulated environment: Dr. Agarwal group’s operational success is significantly contingent upon the availability of skilled ophthalmologists, a resource that is in short supply within the medical profession. As on September 30, 2025, the organisation employed a substantial workforce of approximately 881 doctors, highlighting the critical importance of these professionals to its operations. To attract and retain top medical talent, Dr. Agarwal group provides its doctors with access to state-of-the-art technology and offers competitive incentives that surpass the benefits associated with individual practice. Nevertheless, the company operates in a highly competitive market, characterised by an increasing presence of single-doctor clinics. In this context, the ability to retain its existing pool of skilled ophthalmologists will be a key factor in differentiating the Dr. Agarwal group from its competitors and driving its continued success in the face of intensifying market competition. The group operates in a highly regulated healthcare industry, that requires certain approvals from the government and regulatory authorities. Hence, similar to other healthcare entities, the group remains exposed to regulatory risk, and this will remain monitorable.

 

Exposure to risks related to ramp up and stabilisation of operations in newly added centres: The rapid expansion of the group into new locations presents execution risks, as the timely ramp-up and operational stabilisation of newly added centres are crucial to achieving projected revenue and margin. Delays in scaling patient volume, recruiting skilled medical staff, or establishing local brand recognition could negatively impact the financial performance of these centres, particularly during the initial years of operation. Such challenges may strain cash flow and liquidity until operations stabilise and break-even is achieved. Furthermore, the competitive landscape in many regions means that a slower-than-expected ramp-up could result in underutilised capacity and elevated fixed costs, thereby exerting additional pressure on profitability. Notwithstanding these challenges, the group has demonstrated a successful track record of expansion, having added 45 centres in fiscal 2024 (16 through acquisition), 59 centres (seven through acquisition) in fiscal 2025 and 22 centres (no acquisitions) in the first half of this fiscal. Receptively, more than 50% of the centres (secondary and tertiary centres) opened in fiscal 2024 and more than 15% of the centres (secondary and tertiary centres) opened in fiscal 2025 were generating positive Ebitda (earnings before interest, taxes, depreciation and amortisation) at the regional level at the end of March 31, 2025, indicating a robust and rapid ramp-up. The group is expected to add approximately 50–55 centres on-year, primarily through organic growth and no major acquisitions are expected. Effective management of the expansion process, efficient operational stabilisation, and successful establishment of local brand recognition will be critical in maintaining the healthy Ebitda level, which remains monitorable.

Liquidity Strong

On a group level, cash and equivalents stood at Rs 454 crore as on September 30, 2025, while fund-based limit of Rs 11 crore remains unutilised. The group is expected to generate annual net cash accrual of more than Rs 300 crore against yearly term debt obligation of Rs 80–90 crore in the medium term. The current ratio stood at 1.66 times as on March 31, 2025.

Outlook Stable

Crisil Ratings believes the group will continue to benefit from strong market position and healthy brand recall over the medium term.

Rating Sensitivity Factors

Upward factors:

• Sustained revenue growth while maintaining operating profitability at over 25%, thereby benefiting cash generation
• Maintenance of strong financial risk profile, including sustenance of gross debt (including lease liabilities) to Ebitda ratio

 

Downward factors:

• Significant decline in revenue growth rate or operating margin falling below 20% owing to delay in ramp up of centres
• Debt-funded capex or acquisitions resulting in weakening of the financial risk profile

About the Group

Incorporated in 2010, DAHCL provides a comprehensive range of eyecare services, including covering cataract, refractive and other surgeries; consultations, diagnosis and non-surgical treatments; and sell optical and eyecare related pharmaceutical products. The group has a network of 239 facilities, as on March 31, 2025. The group commenced international operations in 2012 and as of March 31, 2025, operates 19 facilities across nine countries in Africa.

 

The group is led by Chairman, Dr Amar Agarwal, who has more than 35 years of clinical experience in the eyecare services industry, and an experienced management team comprising of Dr Adil Agarwal - CEO, Dr Anosh Agarwal - Chief Operating Officer, Dr Ashvin Agarwal – Chief Clinical Officer and Dr Ashar Agarwal - Chief Business Officer.

 

Incorporated in 1994, DAEHL is engaged in the business of providing eye care and related business, majorly in Tamil Nadu. DAEHL is listed on BSE Ltd. DAHCL holds 71.90% of the shareholding in DAEHL as of March 2025.

 

Orbit was acquired by DAHCL in fiscal 2017 and is engaged in providing eye care related services through hospitals located in Southeast Asia and Africa.

 

In 2021, DAHCL acquired Aditya Jyot Eye Hospital Pvt Ltd and has 87.8% ownership in the company.

 

In 2024, DAHCL acquired Dr Thind Eye Care Pvt Ltd and holds around 51% of shareholding in DTECPL as of March 2025.

Key Financial Indicators

 Consolidated DAHCL:

As on / for the period ended March 31	Unit	2025	2024
Operating income	Rs crore	1711	1332
Reported profit after tax	Rs crore	95	110
PAT margins	%	5.4%	8.0%
Adjusted Debt/Adjusted Net worth	Times	0.53	0.72
Interest coverage	Times	4.6	4.2

 

DAEHL:

As on / for the period ended March 31	Unit	2025	2024
Operating income	Rs crore	397	319
Reported profit after tax	Rs crore	54.65	46.4
PAT margins	%	14%	15%
Adjusted Debt/Adjusted Net worth	Times	1.6	1.7
Interest coverage	Times	7.7	10.5

Crisil Ratings-adjusted numbers. Net worth has been adjusted for amortized intangible assets such as goodwill. Interest cost includes interest on lease liabilities and interest on deferred payments related to acquisitions.

Any other information: Not applicable