Apollo Hospitals Enterprise, India's largest healthcare provider, has an aggressive expansion plan in place for the current fiscal, backed by a Rs 8,000-crore capital expenditure programme and focus on efficiency and complex specialties.
The healthcare company plans to add 4,300 beds over the next three to four years, with 2,000 beds expected to become operational in FY26.
These additions would largely materialise in the second half of FY26, with critical projects in Bengaluru (Sarjapur), Hyderabad (Jubilee Hills and Secunderabad), Gurugram, Kolkata and New Delhi getting operational, Dr Madhu Sasidhar, president & CEO of the hospitals division, and Krishnan Akhileswaran, group chief financial officer, told Moneycontrol.
Expansion
To fund this expansion, Apollo has already invested Rs 2,000 crore in land and initial project development. The remaining Rs 6,000 crore will be financed through existing cash reserves and internal accruals, with no immediate need for external fundraising.
“We generate healthy free cash flows, north of Rs 1,000 crore annually even after routine expenses,” said Akhileswaran. “There is no immediate need for external fundraising for the current capex pipeline.”
Apollo closed FY25 with consolidated revenue of Rs 21,794 crore, a 14 percent growth from the previous year, while earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 26 percent to Rs 3,022 crore. Its profit after tax jumped 61 percent to Rs 1,445 crore.
Within healthcare services, revenues crossed the Rs 10,000 crore milestone for the first time, driven by volume growth, a richer case mix, and a 7 percent rise in average revenue per occupied bed (ARPOB) to Rs 63,569.
As the network grew more efficient, occupancy climbed to 68 percent even as average length of stay (ALOS) decreased, which company officials attributed to tech-enabled operational efficiency.
'Congo' specialities
Sasidhar said the hospital chain continues to focus on “Congo specialties”— high-complexity, high-margin segments like cardiac, oncology, neurology, gastroenterology, and orthopaedics. These segments now contribute 59 percent to revenue, up from 57 percent in the previous year, reflecting a deliberate move to elevate case complexity.
“We’ve strategically increased high-complexity case volumes while improving occupancy and productivity,” said Sasidhar said. “This has directly contributed to our ARPOB growth and EBITDA margin resilience,” he added.
Despite a decline in medical tourist from Bangladeshi, with particularly affected Tamil Nadu, the company compensated through deeper domestic penetration and higher-value international markets.
As the ties between the two countries have deteriorated following the last year’s ouster of prime minister Sheikh Hasina after a mass uprising, New India has reduced medical visas for Bangladeshis, the largest group to travel to India for medical care.
Sasidhar said Apollo is not banking on a short-term recovery in medical visa volumes but is mitigating the gap through better specialty mix and local growth.
Margin growth
Akhileswaran declined to offer explicit EBITDA guidance but said the management remains confident of maintaining healthcare services EBITDA margins of around 24 percent this fiscal.
New hospitals will take 12 months to break even and their initial drag is expected to be limited to Q4FY26, he said.
"Cost optimisation, particularly in material costs and workforce productivity via digital interventions, will help offset any pressure from new capacity. Moreover, a favourable payer mix and higher occupancy in metros are expected to continue supporting ARPOB and margins," Akhileswaran said.
Digital arm turnaround
Apollo 24/7, the company’s digital health arm, is targeting cash break-even between Q3 and Q4 of FY26, as it scales up its pharmacy, diagnostics, and telehealth offerings.
It has already introduced a 19-minute medicine delivery model in six cities and expanded its insurance distribution and AI-led health services.
With more than 40 million registered users, over 6,600 pharmacies, and a platform gross merchandise value (GMV) of Rs 3,007 crore in FY25, Apollo is cementing its position as India’s largest omni-channel healthcare player.
At 1.44 pm, the Apollo Hospitals stock was trading at Rs 6,964.50 on the National Stock Exchange, up 1.22 percent from the previous close.
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