Apollo HealthCo races toward Rs 25,000‑crore revenue target as digital losses narrow sharply

Apollo Hospitals

• Apollo HealthCo aims for ₹25,000 crore revenue by FY27 with 7% EBITDA margin.
• Digital losses decreased significantly with a 20% revenue rise in Q3 FY26.
• Apollo's inpatient revenue rose 11%, with strong margins.

Did our AI summary help?

Apollo Hospitals’ digital and omnichannel arm, Apollo HealthCo, is firmly on track to hit its ambitious Rs 25,000‑crore revenue target by FY27 end, the company's key executives told Moneycontrol.

“They (Apollo HealthCo) are already going to be close to the Rs 20,000‑crore combined number this year… and by the end of next year, they should be getting closer to the Rs 25,000‑crore number with a 7 percent  EBITDA margin,” Krishnan Akhileswaran, Group CFO told Moneycontrol.

That confidence comes on the back of a standout Q3, where Apollo — traditionally weighed down by seasonal softness, delivered a quarter with no one‑off tailwinds, just “pure operating momentum,” said Dr Madhu Sasidhar, President and CEO of Apollo Hospitals.

PE firm Advent International has invested Rs 2,475 crore in HealthCo for 12.1 percent stake in April 2024. Apollo is aiming potential IPO for HealthCo  by end of FY27.  HealthCo consists of 7,113 pharmacy retail outlets, Apollo 24/7 telehealth and digital platform with over 46 million registered users offering the entire consumer healthcare wallet — including online consultations, medicine delivery, diagnostics, insurance, and last‑mile health services.

Digital on turnaround path

The turning point for HealthCo is the sharp reduction in digital losses and surge in profitability. The business turned in one of its strongest quarters yet, with revenue rising 20 percent year‑on‑year and platform gross merchandise value (GMV) jumping  28 percent to Rs 525 crore in Q3 FY26.

More importantly, digital losses continued to narrow, with the platform reporting its lowest cash loss of Rs 29.2 crore in the quarter. The digital business reported a cash loss of around Rs 74 crore in the corresponding quarter of the previous year

HealthCo’s PAT nearly tripled year‑on‑year to Rs 87 crore, driven by rising transaction volumes, a richer private‑label mix of about 15.5 percent, and a sharply more efficient omnichannel user acquisition model that required materially lower marketing spend.

Offline pharmacy distribution continues to be a volume moat and cash generator, while online pharmacy and Apollo 24/7 are fast becoming the new consumer funnel.

The company has also expanded diagnostics to 18 new cities through HealthCo channels and continues to scale its insurance distribution segment. The company said marketing spend for customer acquisition has dropped sharply despite rising user volumes—an indication that the omnichannel funnel is maturing.

“New user acquisition is being driven by an omni‑channel strategy, with marketing spend significantly lower than last year,” management said in its investor update.

For HealthCo, which is approaching scale profitability, the next 12–15 months will be critical as it targets a 7 percent EBITDA margin and prepares for the listing of its new structure post the composite scheme. If current trajectories hold, Apollo’s digital and omnichannel bet may soon rival its hospital business as the group’s most powerful growth engine.

Healthcare services remains strong

Apollo’s core hospital business also delivered a solid quarter, benefiting from a mix shift towards high‑complexity care. Average revenue per inpatient climbed 11 percent, driven by oncology, cardiac, neuro and transplant procedures, with transplants alone increasing nearly 50 percent at the group level. CEO Sasidhar emphasised that shorter lengths of stay, powered by digital operational improvements, allowed Apollo to grow volumes despite a small dip in occupancy.

“We have done well on a seasonally low quarter,” he said, adding that the company’s investments in clinical talent, sales funnels and digital infrastructure are now translating into sustained throughput.

International patient volumes, a key margin lever, rebounded strongly with a 28 percent increase after last year’s Bangladesh‑led base‑effect drag subsided. With these headwinds now behind them, Sasidhar suggested the growth could continue across geographies. Hospitals reported a margin of 24.8 percent in Q3, inching closer to the company’s long‑held 25 percent EBITDA aspiration.

Management was also bullish on the momentum heading into the fourth quarter. Sasidhar reiterated that Q3’s numbers were unaffected by seasonal or episodic boosts and instead reflected steady structural demand.

“Don’t expect anything to change… the momentum should continue,” he said, noting that surgical volumes and catheter‑based interventions remain strong while international patient inflow continues to improve.

Akhileswaran added that Apollo expects no significant deviation from the Q3 trajectory in Q4, given the absence of macro or operational disruptions and continued traction in complex care.