Apollo Hospitals Enterprise Ltd Q4 FY26 Earnings Call: Revenue Crosses Rs. 25,000 Cr, HealthCo Guides Rs. 25,000 Cr Run Rate

Apollo Hospitals Enterprise Ltd held its Q4 FY26 earnings call on May 20, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Consolidated Revenue Crosses Rs.25,000 Cr; PAT Grows 36%

• Consolidated revenue of Rs.25,229 Crfor full FY 2025-2026, crossing Rs.25,000 Cr for the first time (+16% YoY). Q4 FY26 consolidated revenue was Rs.6,105 Cr (+18% YoY), driven by 7% volume growth, 5% case mix, and 4% price revisions.
• Healthcare services segment revenue of Rs.3,268 Crin Q4 FY26 (+16% YoY). Group occupancy stood at 68% (established hospitals 69%, metro 71%), with average length of stay reduced to 3.19 days (-3.3%).
• Consolidated EBITDA of Rs.1,011 Crin Q4 FY26 (+31% YoY). Healthcare services EBITDA was Rs.781 Cr (margin 23.9%). Apollo HealthCo EBITDA improved to Rs.156 Cr (vs Rs.36 Cr in Q4 FY25), and the online business cash loss narrowed to Rs.16 Cr.
• Consolidated PAT of Rs.529 Crin Q4 FY26 (+36% YoY). For full FY26, consolidated EBITDA was Rs.3,769 Cr (+25% YoY) and PAT was Rs.1,942 Cr (+34% YoY). Healthcare services ROCE stood at 25.4%.
• Key specialties (cardiac, oncology, neurosciences, gastro, orthopedics) grew 22% YoYin Q4 FY26. Cardiac sciences grew 19% and orthopedics ~20%, driven by clinical program building.
• Lower seasonal admissions and moderation in international patient volumes, particularly from Bangladesh, weighed on the quarter.

1,400 Beds Under Commissioning; Drag Narrows

• 1,400 new beds under constructionacross metro markets (~25% capacity addition). 185 beds are already operational; the remaining ~670 beds will be commissioned over the next 12 months, with construction of most facilities (except Pune Phase 2) ready by Q2/Q3 FY 2026-2027.
• Full cohort of 1,500 newly commissioned beds expected to break even by FY 2027-2028at 50–55% occupancy. Management targets at least 5,600 beds operational by mid-FY 2026-2027.
• New hospital EBITDA loss for FY 2026-2027 guided at Rs.150 Cr(reaffirmed at Rs.140 Cr in a separate reference). Q4 FY26 drag was Rs.41 Cr; peak may increase in Q2 FY27 before declining. Sunita Reddy noted Q4 FY27 as a target for some hospitals to break even.
• Established hospitals (excluding new sites) grew 13–14%in Q4 FY26 with an EBITDA margin of 25.5%. Management expects to sustain this level in FY 2026-2027 and sees further improvement opportunity of Rs.100–125 Cr(period unspecified)from cost reduction and operating leverage.
• Tamil Nadu region occupancy at 68%for FY 2025-2026, with management citing 6–7% headroom for occupancy-driven growth. No bed additions are planned for FY 2026-2027, so growth will rely on case mix and ARPP improvement.
• New hospitals have onboarded insurance partners: Apollo Athena has 6 high-volume insurers, Pune has 3 (plus Star Health), Kolkata 6, Hyderabad 4, and Bangalore 3 of the top 8.

HealthCo Targets Rs.25,000 Cr Run Rate; 24/7 Nears Breakeven

• Apollo HealthCo proforma revenue of ~Rs.19,000 Crin FY 2025-2026 (actual), growing ~19.5%. Management guided to a Rs.25,000 Cr annualised run rate by Q4 FY 2026-2027 with a 6.5–7% EBITDA exit margin (vs 4.3% in FY26).
• Apollo 24/7 is acquiring 200,000–220,000 new customers per monthwith a customer acquisition cost that management considers favourable versus peers. Same-day delivery achieved for 90% of orders; insta delivery (19 min to 1 hour) targeted at 50–55%, with delivery cost on a downward trend.
• Digital segment guided to near breakeven in Q1 FY 2026-2027(excluding ESOP cost) and breakeven including ESOP cost by Q3 FY 2026-2027. The customer acquisition engine now delivers 20–30% new customers without paid marketing.
• Diagnostic business grew 75% in FY 2025-2026; sustainable growth of 25–35% is expected in FY 2026-2027. The diagnostic business derives 100% from within the Apollo ecosystem.
• AHLL (Apollo Health & Lifestyle) Q4 FY26 EBITDA of Rs.75 Cr(+58% YoY, margin 15.3% vs 12% in Q4 FY25). Diagnostics within AHLL delivered 15% margins, attributed to a structural shift in lab utilisation and B2B expansion.
• Digital consults growing 15–20%(vs Practo); physical appointment facilitation for hospitals and clinics showing positive trends. Cross-pollination between pharma and digital/offline saw a "very big jump" in FY26, with similar growth expected in FY26-27.
• Insurance and technology investments (AI, PHR, Ask Apollo) will incur ~Rs.6–7 Cr per quarter in FY 2026-2027, but are expected to improve efficiency and margin profile over time.

Cloud9 Deal Closed; Demerger Timelines Set

• Cloud9 transaction concluded on the call date (20 May 2026); CCI approval is expected in the next couple of months, with commercial completion targeted in Q2 FY 2026-2027 (August/September 2026), after which it will be reflected in AHLL numbers.
• Apollo Cradle & IVF business sold to Cloudnineat an enterprise value of Rs.1,500 Cr (implied 35x EBITDA on FY26 vertical revenue of Rs.450 Cr and EBITDA of Rs.45 Cr). Net cash proceeds of Rs.150 Cr will be redeployed into primary care (clinics and diagnostics).
• Apollo Cradle brand will be retained for one year, then transition to Cloudnine. Post-transaction, AHLL will focus on primary care, diagnostics, Spectra, and dialysis. Spectra and other AHLL assets are not part of the transaction.
• Demerger of omnichannel pharmacy & digital health (Apollo HealthTech): shareholders' meeting scheduled for 24 June 2026; NCLT process to follow (3–4 months). Listing expected by the end of Q4 FY 2026-2027 (or possibly earlier in Q4 FY 2026-2027).
• Net debt increased ~Rs.1,200 Cr quarter-on-quarterin Q4 FY26: Rs.400 Cr was new CAPEX and Rs.1,250 Cr was a payout to buy out IFC from AHL (healthcare services balance sheet).
• FY 2026-2027 CAPEX guided at Rs.1,980 Crfor 1,000 beds. Hospital services segment generated operating cash flow of ~Rs.1,850 Cr (pre-dividend) in FY26, with ~Rs.1,550 Cr post-dividend, which is fully redeployable after recurring hospital CAPEX of ~Rs.550 Cr.

Established Margins to Sustain; HealthCo Margin Levers Identified

• Established hospital EBITDA margin of 25.5%in Q4 FY 2025-2026 is expected to sustain for FY 2026-2027. Management sees a further improvement opportunity of Rs.100–125 Cr(period unspecified)from cost reduction and operating leverage.
• Healthcare services margin (established units) guided to improve by at least 100 bpsin FY 2026-2027, driven by volume growth, case mix improvement, and operating leverage.
• HealthCo exit margin of 4.3% in FY 2025-2026; target exit margin of 6.5–7% by Q4 FY 2026-2027. Key drivers: digital losses near breakeven in Q1 FY27, growth in private-label sales, and cost reduction.
• Offline pharmacy long-term steady-state margin guided at 8–9%at a matured stage(period unspecified), driven by higher private-label penetration and cost management.
• ESOP expense for FY 2026-2027 guided at ~Rs.50 Cr, with Q1 FY27 estimated at Rs.22–23 Cr, tapering thereafter. Apollo 24/7 breakeven excluding ESOP is targeted for Q1 FY27, and including ESOP cost by Q3 FY27.
• Management is working on 2–3 focus areas related to GLP-1 but provided no further details or timelines.

FY27 Outlook: Mid-Teen Revenue Growth, Margin Expansion

• Hospital business guided to mid-teen revenue growthin FY 2026-2027, with gradual acceleration from new hospital ramp-up.
• Healthcare services margin improvement of at least 100 bpsexpected in FY 2026-2027 for established units. Hospitals division EBITDA loss guided at Rs.150 Cr for FY 2026-2027.
• HealthCo annualised revenue run rate target of Rs.25,000 Crby Q4 FY 2026-2027, with a 6.5–7% EBITDA exit margin. HealthCo sustained ~21% growth entering FY27.
• CAPEX of Rs.1,980 Cr guided for FY 2026-2027to fund 1,000 new beds. Operating cash flow is expected to remain at a similar level to FY26 (~Rs.1,850 Cr pre-dividend), supporting growth spending.
• Management expressed confidence entering FY 2026-2027with "strong fundamentals across all three business lines, a visible expansion pipeline, and continued progress in clinical excellence, technology, and digital health."
• Legal case with the Delhi governmenthas "no implication" on Apollo Hospitals' holding in Indraprastha Medical. Management expressed confidence in resolving the case, citing automatic lease renewal and fulfilment of free-bed obligations. There are no plans to acquire the Delhi government's 26% stake.