Ramsay Health Care's Best Shape in Years Meets a Broader Sector Tailwind

A French demerger plan and genuine Australian margin recovery drove early gains, before a sector-wide rally added even more momentum.

30 Sep 2026 · 4 min read

Ramsay Health Care has staged a dramatic recovery through 2026, jumping more than 12 percent in a single day in February on results that beat expectations, then rallying more than 18 percent in a single month on two separate occasions, as a plan to spin off its troubled French hospitals business and a genuine turnaround in the core Australian operations combined to convince fund managers the company really is in its best shape in years.

A demerger and a genuine domestic turnaround

Yarra Capital Management named Ramsay its top pick in February, noting the stock had bounced more than 12 percent on results day and backing the planned sale of its problematic French hospitals business, Ramsay Santé, arguing that combined with improving admissions, operating theatre utilisation and margins, the company was in its best shape in years, even while sitting around 50 percent below its 2022 peak. Blackwattle Investment Partners detailed a strong first-half result with revenue 2 percent ahead of expectations, EBIT 4 percent ahead and net profit 15 percent ahead, driven by improving Australian revenue and margin trends, with second-quarter Australian revenue accelerating on the first, and a 4.5 percent EBIT beat at the French division serving as a good lead indicator for executing the planned in-specie distribution. Spheria Asset Management said shares rose 18 percent that month on the combination of the results and the demerger announcement, with group revenue up 10 percent and underlying EBIT growth of 7 percent, the Australian division delivering clean 7 percent EBIT growth through higher admissions and better cost control.

When combined with an improvement in things like admissions, operating theatre utilisation and margins, the company was in the best shape in years.

— Yarra Capital Management, Article, February 2026

The French demerger's own numbers reassure

Spheria Asset Management later reported a trading update on Ramsay Santé itself, showing revenue growth of 3.1 percent and EBITDA growth of 4.4 percent for the nine months to March 2026, achieved despite cost headwinds outside the company's control, including an anticipated shortfall in a French government revenue guarantee, and driven by solid operating cost control, evidence the demerging business was not simply being cut loose in poor shape.

A June rally with no news at all

Perpetual Asset Management reported the stock returned 18.6 percent in June, its largest monthly return in more than three years and its second gain above 18 percent for the year, despite no company-specific news during the month, buoyed instead by a broader rally in the health care sector that saw the S&P/ASX 200 Health Care Index rise 13.3 percent. Perpetual noted industry data suggested volume growth had slowed from first-half trends, but believes Ramsay benefited from competitor challenges and continued strong pricing. Pengana Capital Group described health care as the strongest-performing sector in the Australian market over the period, with Ramsay its most significant contributor, crediting the hard assets and low obsolescence of hospital infrastructure.

Ramsay Health Care returned 18.6% in June, its largest monthly return in over three years and its second gain above 18% in 2026.

— Perpetual Asset Management, Monthly Report, June 2026

Bulls keep adding into strength

Ten Cap said it added to its position during the earlier healthcare sell-off, viewing Ramsay as a quality hospital franchise with durable demand trading at a materially more attractive valuation relative to its long-term earnings power, and said the June rebound reinforced its conviction in accumulating dislocated quality. Perpetual Asset Management separately argued Ramsay presents compelling upside, with well-understood negatives such as labour inflation and changes to private health insurance rebates now priced in, leaving the focus on genuine opportunity to improve operating performance and asset productivity in the core Australian business. Paradice Investment Management said healthcare looks interesting for the first time in a long time on valuation grounds, singling out Ramsay specifically and crediting a management team focused on returns, the kind of reinvigoration story that can deliver more upside than the market initially expects.

What fund managers say they are watching next is whether the Ramsay Santé demerger completes as planned, whether Australian admissions and margin improvements continue at their current pace, whether June's sector-wide rally proves durable once company-specific news resumes, and how far management's returns-focused strategy can push a reinvigoration of the core Australian hospital business.