Analyst Concall
Apollo Hospitals sees 140 bps traction in healthcare margin FY26
This story was originally published at 13:17 IST on 31 May 2025
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--Apollo Hospitals: Continue to add 600 new pharmacies every year
--Apollo Hosp: Focused on other intl mkts to mitigate Bangladesh impact
--Apollo Hospitals: Unrest in Bangladesh impacted INR-1-bln sales FY25
--Apollo Hospitals: Four new hospitals to commence ops in Oct-Dec
--Apollo Hospitals: Scope for 140 bps improvement in healthcare ops margins
--Apollo Hosp: Likely more patient inflow, cutting costs to improve margins
--CONTEXT: Apollo Hospitals mgmt comments in post-earnings analyst call
--Apollo Hosp: Jan-Mar avg revenue per operating bed INR 63,569, up 7% YoY
By Narayana Krishna and P. Madhu Kumar
HYDERABAD/MUMBAI - Apollo Hospitals Enterprises Ltd. sees a 140-basis-point improvement in its healthcare services business margins in 2025–26 (Apr–Mar), led by better patient inflow and reduced operating costs, the company's management said during a post-earnings analyst call.
For Jan–Mar, Apollo Hospitals reported a 117-basis-point year-on-year improvement in its earnings before interest, tax, depreciation and amortisation margins for the healthcare services business at 24.3%.
The company reported an over-10% year-on-year growth in its healthcare services, or hospital business, to INR 28.43 billion. Healthcare services, comprising a network of hospitals, contribute over 51% of the company's total revenue.
On Friday, Apollo Hospitals reported a consolidated net profit of INR 3.9 billion for the March quarter, up 53.5% year-on-year and 4.7% quarter-on-quarter, exceeding analysts' estimates. The Chennai-based healthcare services and pharmacy retailing company posted a 13% year-on-year and 1.2% sequential growth in its consolidated revenue from operations to INR 55.9 billion for the quarter, in line with estimates.
The expected ramp-up in existing hospitals is likely to improve segment margins by up to 80 basis points, while cost-cutting measures could add 60 basis points, the management said.
For the March quarter, Apollo Hospitals' management said four new hospitals – in Pune, Kolkata, Defence Colony in Delhi, and Sarjapur in Bengaluru – will become operational in Oct–Dec.
The management said political unrest in Bangladesh impacted revenue by over INR 1 billion in FY25, and the company is now focused on entering new geographies such as Congo to mitigate the impact.
Political uncertainty in Bangladesh has drastically reduced patient footfall from the country. A large number of patients from Bangladesh typically visit Chennai and Kolkata units of Apollo Hospitals to undergo super-specialty treatments. As of Dec. 31, international patients accounted for 6% of the company's total hospital business.
On its arm Apollo HealthCo Ltd., the management reaffirmed its earlier guidance of reaching the INR-250-billion revenue mark once the consolidation of pharmacy distribution company Keimed Pvt. Ltd. is complete. Apollo HealthCo is the operating company for Apollo Hospitals' pharmacy retailing and distribution business, along with the Apollo 24/7 digital platform.
Apollo HealthCo operated 6,626 pharmacy retail stores as of Mar. 31 under the Apollo Pharmacy brand. The company will continue to add 600 new stores each year, the management said. The management also noted that its newly launched insurance business via Apollo 24/7 will contribute INR 80 million-INR 90 million in monthly premium income in FY26.
On Friday, Apollo Hospitals' shares closed 0.6% lower at INR 6,880.50 on the National Stock Exchange. End
Edited by Deepshikha Bhardwaj
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