Apollo Hospitals is on track to transform its omni-channel subsidiary Apollo HealthCo into a Rs.25,000 crore revenue engine with 7% EBITDA margins by the end of FY27, ahead of its planned public listing, top executives told Moneycontrol.
Backed by private equity firm Advent International, Apollo HealthCo—which combines offline pharmacy distribution, digital health services via Apollo 24/7, and the soon-to-be-merged Keimed—has seen a sharp turnaround in profitability. The company reported a fourfold jump in PAT to Rs 73.4 crore in Q2FY26, with cash losses narrowing to Rs 38.6 crore from Rs 85 crore a year ago.
“We are confident that by the time HealthCo lists in Q4FY27, it will be run-rating at Rs 25,000 crore with 6–7% EBITDA margins,” said CFO Krishnan Akhileswaran. “The focus is on operational efficiencies, same-store growth, and expanding private label sales in non-pharma categories,” he added.
Apollo HealthCo’s EBITDA margin currently stands at 4.4%, with the offline pharmacy segment contributing 7.8% and digital services still in the red. However, executives expect breakeven within two quarters.
AHLL stake buyback and monetisation strategy
Apollo Hospitals is also consolidating its retail and specialty health subsidiary Apollo Health & Lifestyle Ltd (AHLL), having initiated a buyback of IFC’s stake. The Rs.2,000 crore transaction is being funded entirely through internal accruals and existing cash reserves.
“We have sufficient cash on books and generate Rs.1,500 crore annually in internal accruals,” Akhileswaran said. “We’re not looking to raise external capital for AHLL at this stage, though there is interest from potential partners.”
AHLL, which includes diagnostics, clinics, and specialty centers, posted 17% revenue growth and 21% EBITDA growth in Q2 FY26, driven by diagnostics and corporate outreach.
Expansion plans
Apollo is investing Rs 8,300 crore to add 4,400 beds across India by FY30, with Rs 5,800 crore yet to be deployed. The expansion includes greenfield and brownfield projects in Pune, Hyderabad, Kolkata, Chennai, and Mumbai.
“We’re seeing strong returns on capital employed—15–17% IRRs on new hospitals,” Sasidhar said. “The focus is on complex care programs, doctor recruitment, and international patient inflows, especially from Bangladesh and the Middle East.”
Apollo’s consolidated PAT rose 33% year-on-year to Rs 9,100 crore in H1FY26, with the hospital division maintaining a robust 24.6% EBITDA margin.
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