Apollo Hospitals Enterprise Limited — Q3 FY26 earnings call

Call held 11 Feb 2026

Management summary

Apollo Hospitals delivered a strong Q3 FY26, marked by double-digit growth across all segments, significant margin expansion, and robust PAT growth. While new hospital ramp-up costs and a delay in digital business breakeven due to revenue recognition issues were noted, the company remains focused on strategic capacity expansion and integration of Keimed to drive future growth and profitability.

Highlights

  • Consolidated revenue grew by 17% year-on-year to INR 6,477 crore.

  • Consolidated EBITDA registered a robust growth of 27% year-on-year to INR 965 crore.

  • Consolidated PAT grew 35% year-on-year to INR 502 crore.

  • Healthcare Services business recorded revenue of INR 3,183 crore, reflecting a healthy 14% year-on-year growth, with EBITDA at INR 719 crore (18% growth) and margins at 24.8%.

  • Apollo HealthCo reported revenues of INR 2,827 crore, a 20% year-on-year growth, with pharmacy distribution EBITDA up 23% YoY to INR 195 crore.

  • AHLL delivered an EBITDA of INR 48 crore, a strong 39% year-on-year growth with margins improving to 10.2% from 8.8%.

Concerns

  • Digital business cash losses were INR 29 crore, and cash EBITDA breakeven is pushed out by one quarter to Q1 FY27 due to an INR 17 crore insurance revenue recognition mismatch.

  • New hospital operationalization is expected to incur INR 150 crore in losses for the next year (FY27).

  • Gurugram hospital operationalization is delayed by 2-3 months to Q2 FY27 due to environmental issues.

Key financials

  1. Consolidated Revenue ₹6,477 Cr +17%YoY
  2. Consolidated EBITDA ₹965 Cr +27%YoY
  3. Consolidated PAT ₹502 Cr +35%YoY
  4. Healthcare Services Revenue ₹3,183 Cr +14%YoY
  5. Healthcare Services EBITDA ₹719 Cr +18%YoY
  6. Healthcare Services EBITDA Margin 24.8%
  7. Apollo HealthCo Revenue ₹2,827 Cr +20%YoY
  8. Apollo HealthCo EBITDA ₹128 Cr +124.5%YoY
  9. AHLL Revenue ₹467 Cr +20%YoY
  10. AHLL EBITDA ₹48 Cr +39%YoY
  11. AHLL EBITDA Margin 10.2%
  12. Digital Business Cash Losses ₹29 Cr
  13. Platform GMV ₹525 Cr +28%YoY
  14. Average Revenue Per Patient (ARPP) ₹1,80,917
  15. Group-wide Occupancy 67%

What they filed

Q1 FY27: revenue up 20.6%, net profit up 38.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue5,589 5,527 5,592 5,842 6,304 +13%6,477 +17%6,606 +18%7,044 +21%
EBITDA816 762 770 852 941 +15%965 +27%1,011 +31%1,092 +28%
Net profit396 379 414 441 494 +25%516 +36%551 +33%610 +38%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹6,477 Cr Total
  • Healthcare Services ₹3,183 Cr 49.1%
  • Apollo HealthCo ₹2,827 Cr 43.6%
  • AHLL ₹467 Cr 7.2%

Capital allocation

high confidence
  • Capex Capex disclosed
    • Operationalized 75 beds in Pune facility
    • Commissioning four new hospitals (Hyderabad, Kolkata, Bangalore, Gurgaon) to add ~1,500 additional operating beds
    During the quarter, we operationalized 75 beds in our Pune facility. As we enter the next fiscal, we will be commissioning four new hospitals, one each in Hyderabad, Kolkata, Bangalore and Gurgaon, further strengthening our presence in key metropolitan markets with strong fundamentals. These facilities, along with the ramp-up in our recently commissioned Pune hospital, will approximately add 1,500 additional operating beds to our network, representing a significant step-up in capacity and a clear runway for medium-term growth.
  • M&A Keimed Merger · Pending regulatory

    To capture the full benefits of scale with the combined entity to achieve a run rate of INR 25,000 crore in combined revenues with 7% EBITDA.

    Expected to achieve a run rate of INR 25,000 crore in combined revenues with 7% EBITDA.

    We have also made progress with respect to the regulatory integration process for the composite scheme of Keimed merger and demerger of Apollo HealthCo and remain well positioned to capture the full benefits of scale with the combined entity to achieve a run rate of INR 25,000 crore in combined revenues with 7% EBITDA.

Guidance & targets

Profitability

  • New Hospital Losses Profitability · next year (FY27) · High confidence INR 150 crore
    So we will come back to you by Q4 one more time, but we continue to believe that INR150 crore is a good number for now.

    — A. Krishnan

  • Digital Business Cash EBITDA Breakeven Profitability · Q1 FY27 · High confidence Breakeven

    Previously End of Q4 FY26 → Breakeven

    So, if I were to understand it correctly, you are saying that the digital -- sorry, the digital cash EBITDA breakeven is now probably pushed out by a quarter? By one quarter. By one quarter, yes. Because of this insurance mismatch that has happened.

    — Madhivanan B.

  • Keimed Combined EBITDA Margin Profitability · post-merger · High confidence 7%
    We have also made progress with respect to the regulatory integration process for the composite scheme of Keimed merger and demerger of Apollo HealthCo and remain well positioned to capture the full benefits of scale with the combined entity to achieve a run rate of INR 25,000 crore in combined revenues with 7% EBITDA.

    — Suneeta Reddy

  • New Hospital Breakeven (1300 beds) Profitability · 2 years · High confidence Breakeven
    In 2 years, we should be breakeven on 1,300 beds that we are talking about.

    — Suneeta Reddy

Revenue

  • Keimed Combined Revenue Run Rate Revenue · post-merger · High confidence INR 25,000 crore
    We have also made progress with respect to the regulatory integration process for the composite scheme of Keimed merger and demerger of Apollo HealthCo and remain well positioned to capture the full benefits of scale with the combined entity to achieve a run rate of INR 25,000 crore in combined revenues with 7% EBITDA.

    — Suneeta Reddy

  • Physical Pharmacy Same-Store Growth Revenue · near to medium term · High confidence 18%
    On the same-store growth, we expect about 18% and store additions will continue to be in the range of 600 per annum.

    — Obul Reddy

  • Existing Hospital Revenue Growth Revenue · next year · Medium confidence 12-14%
    So as you know that we are looking at we continue to look at seeing how we can at least be at the 12%, 13%, 14% growth on the existing hospitals, but we will see how the year starts and how we progress.

    — A. Krishnan

  • New Beds Additional Revenue Growth Revenue · next year · Medium confidence 3-4%
    And then we should -- the additional beds we should clearly add another 3%, 4%.

    — A. Krishnan

  • Platform GMV Growth Revenue · FY26 · High confidence 30%
    You can expect a consistent growth of around, say, 30% of the GMV for this financial year.

    — Sanjiv Gupta

Capacity

  • Physical Pharmacy Store Additions Capacity · near to medium term · High confidence 600 per annum
    On the same-store growth, we expect about 18% and store additions will continue to be in the range of 600 per annum.

    — Obul Reddy

Margin

  • Existing Hospital Margin Expansion Margin · next year · High confidence 100 basis points
    At least 100 basis points is the margin expansion, which is possible in the existing business next year.

    — A. Krishnan

Occupancy

  • New Hospital Occupancy Rate (First Year) Occupancy · coming year · High confidence 40%
    It will be around 40%.

    — Suneeta Reddy

What to watch in Q4 FY26

Digital Business Cash EBITDA Breakeven

Q1 FY27
Current Cash losses of INR 29 crore in Q3 FY26
Target Breakeven

Why it matters

Key profitability milestone for the digital segment, impacted by revenue recognition issues this quarter.

So, if I were to understand it correctly, you are saying that the digital -- sorry, the digital cash EBITDA breakeven is now probably pushed out by a quarter? By one quarter. By one quarter, yes. Because of this insurance mismatch that has happened.

Risks & concerns

  • Digital Business Breakeven Delay

    medium

    Cash EBITDA breakeven for the digital business is pushed out by one quarter to Q1 FY27 due to an INR 17 crore insurance revenue recognition mismatch.

    Management acknowledged

  • New Hospital Ramp-up Losses

    medium

    INR 150 crore in losses are expected for the next year (FY27) from the operationalization of new hospital units.

    Management acknowledged

  • Regulatory Delays for New Hospitals

    low

    Operationalization of the Gurugram hospital is delayed by 2-3 months to Q2 FY27 due to environmental issues.

    Management acknowledged

  • Talent Poaching

    low

    An analyst raised concerns about star oncologists being poached, but management asserted Apollo's ability to attract and retain top talent.

    Analyst downplayed

Q&A highlights

7 direct
New Hospital Ramp-up Costs and Operationalization Timeline Direct
So we will come back to you by Q4 one more time, but we continue to believe that INR150 crore is a good number for now. And we have started Pune and Athena just by the last month of the -- in the previous quarter. And we are hoping to ramp both of that up over the next 2, 3 quarters well.

Clarifies the expected losses from new hospitals and the phased operationalization schedule, impacting near-term profitability.

Asked by Binay Singh

Digital Business GMV and Revenue Moderation Direct
See, there are two things which has happened. One is that on 31st of September, we had a very large reduction in the GST on the pharmacy and the other products, which resulted into GMV impact of roughly INR30 crore to INR35 crore a quarter. And secondly, we had one channel of e-commerce, which was Amazon. We were supplying to Amazon and then we stopped that business or that segment somewhere in early Q2 of this fiscal year.

Explains the reasons behind the sequential drop in GMV and revenue growth moderation in the digital business, attributing it to specific one-time factors.

Asked by Binay Singh

Digital Business Cash EBITDA Breakeven Delay Direct
By one quarter. By one quarter, yes. Because of this insurance mismatch that has happened. Otherwise, we are very much on course. That is why you see the minus INR29 crore, which, the cash EBITDA that you are speaking about, the biggest negative is coming from the INR17 crore negative from the insurance business, which has got deferred into the next year.

Confirms the delay in achieving cash EBITDA breakeven for the digital business and specifies the financial impact of the insurance revenue recognition mismatch.

Asked by Neha Manpuria

Hospital IP Volume Trends and ARPOB Growth Drivers Direct
Yes. So, I think you are seeing different phases of optimization. Especially in our West market, we have undertaken a lot of work to improve the quality of revenue. So I think volume by itself may not be the right indicator. We took a more holistic look into it, especially at the quality of revenue and the average revenue per patient. So especially our Navi Mumbai unit has been performing very well on that basis, especially with higher specialty care.

Provides context on the moderation of IP volume trends in certain clusters, linking it to a strategic focus on revenue quality and specialty care rather than just volume.

Asked by Neha Manpuria

ARPOB Growth Discrepancy (3% vs 5%) Direct
Sure. 3% was the tariff increase that we had taken during the year, whereas 5% is the effective price realization that we have done in this year, because there were some insurance contracts which got reset also during the year. So the tariff, what has been presented in the PPT is more the tariff increase, which was done in this year. So this is -- that is the difference between the two numbers.

Clarifies the difference between tariff increase and effective price realization, explaining the drivers of ARPOB growth beyond just pricing.

Asked by Karan Vora

Insurance Contract Negotiations and New Hospital Empanelment Direct
We start the negotiations much before we operationalize the hospital. To give you an example, some of the hospitals that Krishnan spoke about, some of the agreements have been in place or there has been an agreement by both parties on the terms. So we started much before operationalization, if that answers your question.

Addresses concerns about insurance empanelment for new hospitals, indicating proactive engagement to ensure coverage from day one.

Asked by Damayanti Kerai

Keimed Merger Regulatory Integration Progress Direct
We have obtained Competition Commission approval and SEBI approval. We have filed with NCLT. NCLT started -- it has listed and started the hearing. And we await for the next step.

Provides an update on the critical regulatory steps for the Keimed merger, signaling progress towards its completion.

Asked by Bino Pathiparampil

Talent Retention and Poaching Concerns Partial
Well, I think the reverse is also happening. So I think we should be aware that Apollo will continue to attract the best talent. Because, number one, I think we have created a platform that invests not only in technology, but in terms of reach, in terms of market and market share, we will continue to lead with market share. And I think this is what doctors want.

Addresses a potential risk of talent poaching in a competitive healthcare market, with management emphasizing Apollo's strong value proposition for doctors.

Asked by Vivek Agrawal

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance Overview

Apollo Hospitals reported a strong Q3 FY26, maintaining positive momentum with double-digit top-line growth across all three business verticals: Healthcare Services, Apollo HealthCo, and AHLL. Consolidated revenue grew 17% year-on-year to INR 6,477 crore. Consolidated EBITDA saw a robust 27% year-on-year growth, reaching INR 965 crore, and consolidated PAT increased significantly by 35% year-on-year to INR 502 crore. This performance was achieved despite Q3 typically being a seasonally weak quarter.

Healthcare Services Performance

The Healthcare Services division recorded a healthy 14% year-on-year revenue growth to INR 3,183 crore. This growth was driven by a balanced mix: 5% from volume growth, 4% from case mix, and 5% from pricing. Surgical volumes grew by 6%, supported by a focus on CONGO-T specialties, which delivered a robust 16% year-on-year revenue growth. Group-wide occupancy stood at 67%, and average revenue per patient (ARPP) increased to INR 180,917 in Q3 FY26 from INR 173,246 in Q2 FY26, reflecting increased clinical intensity.

Apollo HealthCo & AHLL Performance

Apollo HealthCo's revenues grew 20% year-on-year to INR 2,827 crore. Within this, the pharmacy distribution business recorded an EBITDA of INR 195 crore, a 23% year-on-year increase. AHLL delivered a strong performance with EBITDA growing 39% year-on-year to INR 48 crore, and margins improving to 10.2% from 8.8% in Q3 FY25. Cumulatively, Apollo HealthCo's EBITDA more than doubled to INR 128 crore in Q3 FY26 compared to INR 57 crore in Q3 FY25.

Digital Business Updates & Challenges

The digital business reported cash losses of INR 29 crore, the lowest in any quarter. However, the cash EBITDA breakeven target has been pushed out by one quarter to Q1 FY27 due to an INR 17 crore insurance revenue recognition mismatch and adjustments related to GST and the Amazon e-commerce channel, which impacted GMV by approximately INR 75 crore for Q3. Despite these challenges, the online pharmacy GMV grew by 32%, and the Apollo 24/7 platform added 2 million new users, reaching over 46 million users with a platform GMV of INR 525 crore, up 28% year-on-year.

New Capacity Expansion & Operationalization

Apollo operationalized 75 beds in its Pune facility during the quarter. The company plans to commission four new hospitals in Hyderabad, Kolkata, Bangalore, and Gurgaon, adding approximately 1,500 operating beds. Roughly half of this capacity is expected to be operationalized in FY27, with the balance in early FY28, incurring an estimated INR 150 crore in losses for the next year. The Gurugram hospital's operationalization is delayed to Q2 FY27 due to environmental issues, while Hyderabad, Calcutta, Pune (additional beds), and Sarjapur are expected to operationalize by Q1 FY27.

Keimed Merger & Strategic Vision

Progress has been made on the regulatory integration process for the composite scheme of Keimed merger and demerger of Apollo HealthCo. Competition Commission and SEBI approvals have been obtained, and NCLT hearings have commenced. This merger is strategically positioned to achieve a run rate of INR 25,000 crore in combined revenues with 7% EBITDA, reinforcing Apollo's integrated healthcare ecosystem and patient-centric strategy. Keimed has also streamlined its subsidiary network, with all 100% subsidiaries set to merge into AHLL.

Hospital Margin & ARPP Dynamics

Management expects to maintain hospital margins by balancing new hospital ramp-up with existing hospital performance, targeting at least 100 basis points margin expansion in the existing business next year. ARPP growth is driven by a combination of tariff increases (3%), effective price realization (5%) due to insurance contract resets, and a strategic focus on higher complexity cases and CONGO-T specialties. New hospitals are expected to achieve around 40% occupancy in the first year, with 1,300 beds projected to breakeven in two years.

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