💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 15% YoY in FY25. Healthcare services segment, back-end pharmacy (AHL), and diagnostics/retail health were primary drivers. Pharmacy distribution grew 16% YoY. In Q2 FY26, Apollo HealthCo revenue reached INR 2,661 Cr (up 17% YoY) and Apollo Health & Lifestyle (AHLL) reached INR 474 Cr (up 17% YoY).

Geographic Revenue Split

Revenue is diversified across India: Tamil Nadu contributes 25%, Andhra Pradesh and Telangana 16%, and the Eastern region 23%. The remaining is spread across other geographies and metro/tier-2 cities.

Profitability Margins

Consolidated operating margins improved by 120 bps to 13.9% in FY25 from 12.7% in FY24. Healthcare services maintain robust margins of over 24%. Apollo HealthCo (AHL) margins improved to 1.8% in FY25 from negative levels in FY23/24. Post-demerger of AHL in FY28, margins are expected to reach 21-24%.

EBITDA Margin

Consolidated EBITDA margin is expected to sustain at 13.5-14% in FY26. Healthcare segment EBITDA is strong at 24%. Apollo HealthCo reported an EBITDA of INR 110 Cr in Q2 FY26, up 111.5% from INR 52 Cr in Q2 FY25.

Capital Expenditure

In FY25, total capital expenditure was INR 1,712.7 Cr, comprising INR 1,415.2 Cr for Hospitals, INR 143.7 Cr for AHLL, and INR 153.8 Cr for HealthCo. Planned expansion includes adding 3,500-4,300 beds over the next 3-4 years.

Credit Rating & Borrowing

Maintained 'CRISIL AA+/Stable/CRISIL A1+' rating. Total debt (including lease liabilities) stood at INR 5,389 Cr as of March 2025. The company availed new debt of INR 2,585.3 Cr in FY25 with a gearing ratio of 0.61x.

⚙️ Operational Drivers

Raw Materials

Material costs (medicines, surgical consumables, and medical supplies) represent 25.3% of total revenue.

Key Suppliers

Keimed Pvt Ltd is a key partner for pharmacy distribution infrastructure; other medical equipment and pharmaceutical vendors are used with renegotiated rates to improve unit economics.

Capacity Expansion

Current network includes 6,626 retail pharmacy stores. Planned expansion of 15 hospitals with a combined capacity of 4,300 beds in new and existing markets. Pharmacy segment aims to add at least 500 stores annually.

Raw Material Costs

Material costs are maintained at 25.3% of revenue, moving in line with revenue growth. Procurement strategies include leveraging Keimed's infrastructure and renegotiating vendor rates to reduce digital vertical losses by INR 30 Cr YoY in Q2 FY26.

Manufacturing Efficiency

Occupancy levels improved to 68% in FY25 from 65% in FY24. Average Revenue Per Occupied Bed (ARPOB) grew 5% YoY to INR 60,588. Inpatient (IP) discharges grew 7% to 604,250.

Logistics & Distribution

Pharmacy distribution business leverages a network of 6,626 stores and 96 distribution centers to ensure pan-India accessibility.

📈 Strategic Growth

Expected Growth Rate

15%

Growth Strategy

Growth will be achieved through the addition of 3,500-4,300 beds over 4 years, adding 500 pharmacy stores annually, and scaling the Apollo 24/7 digital platform (currently 44 million users). The company is also focusing on high-end surgical volumes in Centres of Excellence and increasing the mix of private label pharmacy products (currently 15.2% of revenue).

Products & Services

Inpatient and outpatient healthcare services, surgical procedures, pharmacy retail and distribution, diagnostic tests, and digital healthcare consultations via Apollo 24/7.

Brand Portfolio

Apollo Hospitals, Apollo 24/7, Apollo HealthCo, Apollo Health & Lifestyle (AHLL), Keimed, Apollo ESOP 2024.

New Products/Services

Expansion of private labels and generics in pharmacy (15.2% of revenue), digital therapeutics, and insurance monetization through the Apollo 24/7 platform.

Market Expansion

Expansion into Metro Tier 1 and Tier 2 cities with 15 new hospitals. Pharmacy expansion targeting 1,100+ cities and towns.

Market Share & Ranking

Largest private healthcare provider in the domestic Indian market; pharmacy business is more than 2x the size of the nearest competitor.

Strategic Alliances

Strategic investment of INR 725 Cr in Keimed Pvt Ltd by Apollo HealthCo to strengthen the distribution supply chain.

🌍 External Factors

Industry Trends

The industry is shifting toward omnichannel healthcare and digital integration. Apollo is positioning itself as a leader through Apollo 24/7, aiming for breakeven in the digital vertical within 6 quarters.

Competitive Landscape

Operates in a highly competitive market with other private hospital chains and unorganized retail pharmacies, but maintains leadership through scale and clinical excellence.

Competitive Moat

Durable moat through brand equity, the largest physical hospital network in India, JCI accreditations, and a pharmacy business with 2x the scale of competitors. Sustainability is high due to high switching costs in specialized tertiary care.

Macro Economic Sensitivity

Sensitive to domestic economic growth and healthcare spending; however, the essential nature of healthcare provides some resilience to inflation.

Consumer Behavior

Increasing preference for digital health services and home delivery of medicines, addressed by the 44 million user base on Apollo 24/7.

Geopolitical Risks

Minimal direct impact as operations are primarily domestic (India), though global supply chains for medical equipment may be affected.

⚖️ Regulatory & Governance

Industry Regulations

Subject to healthcare regulations, pollution norms for medical waste, and potential government pricing controls on essential medicines and medical procedures.

Environmental Compliance

The company ensures responsible disposal of medical waste and adheres to safety and skills upgradation training for all employees.

Taxation Policy Impact

Deferred tax liability stood at INR 458 Cr in FY25; no significant change from previous year.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the continued cash burn of the Apollo 24/7 platform, which is expected to incur INR 350-400 Cr in annual spends over the medium term.

Geographic Concentration Risk

High concentration in South India, with Tamil Nadu, Andhra Pradesh, and Telangana accounting for 41% of the hospital footprint.

Third Party Dependencies

Significant dependency on Keimed for the back-end pharmacy supply chain and distribution.

Technology Obsolescence Risk

Risk of digital platform obsolescence; mitigated by continuous investment in Apollo 24/7 and recruitment of specialized medical consultants for advanced procedures.

Credit & Counterparty Risk

Receivables increased in FY25, contributing to a higher current ratio, but liquidity remains robust with over INR 1,900 Cr steady-state cash expected.