**Title:** Health-Tech Firms Outperform IT Services in Q3 Growth
**Meta Description:** Health-tech companies report strong growth in Q3, driven by US healthcare demand and regulatory adaptations, outperforming traditional IT services.
**URL Slug:** health-tech-firms-q3-growth
**Headline:** Health-Tech Companies Show Strong Q3 Growth, Outpacing IT Services
In the July-September quarter, Tier-1 information technology (IT) services providers, mid-cap firms, engineering research and development (ER&D) companies, and health-tech firms reported average sequential growth rates of 1.6%, 2.7%, 2.89%, and 4.2%, respectively. This notable performance is attributed to health-tech companies effectively navigating US regulatory challenges, including stricter spending on medical drugs and an increased reliance on software platforms for routine patient and administrative workflows.
Companies such as Sagility, Indegene, and IKS, which were listed on stock exchanges last year, derive most of their revenue from providing customer and software services to clients in the US healthcare sector. Sagility and IKS focus on customer support for healthcare and health insurance companies, while Indegene specializes in pharmaceutical marketing, clinical trials, and medical and regulatory affairs. For the July-September period, Sagility reported revenues of $189.4 million, Indegene $92.2 million, and IKS $90.2 million, reflecting quarter-on-quarter increases of 5%, 3.7%, and 4%, respectively.
This trend is not isolated; health-tech companies have consistently outperformed the major Indian IT firms and auto ER&D companies in the first half of FY26. During the April-September period, health-tech firms achieved an average revenue growth of 16%, compared to just 1.2% for the big five IT companies and 0.26% for auto ER&D firms. Analysts from ICICI Securities noted that the demand for US health tech is driven by a shift from insourcing to outsourcing, technology adoption for cost optimization, and the implementation of comprehensive platform solutions.
Furthermore, a second brokerage highlighted that healthcare spending in the US is projected to rise, which will further enhance demand for health-tech firms. Factors contributing to this increase include an aging population, longer life expectancy, and a growing prevalence of chronic medical conditions. According to Axis Capital analysts, IKS is particularly well-positioned to benefit from the anticipated rise in US healthcare spending. They noted that inpatient and outpatient care accounts for 57% of total US healthcare spending, approximately $2.8 trillion. The addressable market for IKS, which includes provider-centric technology solutions such as revenue cycle management, value-based care, clinical services, coding, and scribing, is valued at around $260 billion and is expected to grow at a CAGR of 7.8% from CY23 to CY28.
In summary, health-tech companies are not only adapting to regulatory challenges but are also capitalizing on the growing demand for healthcare services in the US, positioning themselves for sustained growth in the coming years.
**FAQ:**
**Q: What factors are driving growth in health-tech companies?**
A: Growth in health-tech companies is driven by increased US healthcare spending, a shift from insourcing to outsourcing, and the adoption of technology for cost optimization.
