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Informist, Monday, Feb. 9, 2026

 

By Narayana Krishna

 

HYDERABAD - Apollo Hospitals Enterprise Ltd. is expected to report healthy year-on-year earnings for the December quarter led by growth in the hospitals business, and traction in the pharmacy and diagnostics services segments, brokerages tracking the company said. However, the company's growth may be lower on a sequential basis due to lower occupancy rate following the addition of bed capacity across the network, brokerages added.

 

The Chennai-based healthcare services company is projected to report a consolidated net profit of nearly INR 4.70 billion, which implies a 26% rise on a year-on-year basis, according to the average of estimates from nine brokerages. The company's revenue for the quarter is seen rising 14% on year to INR 63 billion. The company will announce its December quarter earnings Tuesday.

 

Apollo Hospitals' net profit is expected to fall 2% from the trailing quarter, but its revenue is seen flat, estimates show. The quarter-on-quarter weakness in earnings is likely on account of a fall in hospital beds occupancy, as the company added new beds and hospitals during the December quarter.

 

The highest December quarter net profit estimate is nearly INR 5 billion from HDFC Securities Ltd., while the lowest estimate is INR 4.40 billion from Elara Securities (India) Pvt. Ltd. The revenue estimates range from a high of nearly INR 64 billion by Nuvama Wealth Management Ltd. to a low of INR 61.3 billion by Motilal Oswal Financial Services Ltd.

 

The December quarter is a seasonally weak quarter for the hospitals segment, as the festival season leads to the deferral of elective surgeries and discretionary procedures. This impacts volumes, occupancy, and case mix, which constrains operating leverage. The pressure is further amplified by significant capacity additions during the year. This trend is clearly reflected in Apollo Hospitals' quarter-on-quarter earnings performance, analysts said.

 

HOSPITALS OPS

Analysts expect Apollo Hospitals' core hospitals business to deliver 13-15% on-year revenue growth in the December quarter, supported by a steady average revenue per patient growth and incremental contributions from new bed additions, even as the sequential trend remains weak.

 

HDFC Securities and Nuvama Wealth estimate 13-14% on-year hospital revenue growth, driven by 5-6% in-patient volume growth, with the balance coming from improved pricing. Nuvama Wealth expects average revenue per patient to rise 13% on year to INR 68,000, though occupancy is likely to remain low at 65%, down 250 basis points on year, due to capacity additions. Kotak Securities projects 14% on-year hospital sales growth, aided by bed commercialisation of new hospitals in Pune and Delhi.

 

As on Sept.30, Apollo Hospitals has nearly 8,000 operating beds across 73 hospitals. The company will report average revenue per patient instead of average revenue per operating bed, which other industry players broadly follow.

 

On a sequential basis, its performance is expected to remain under pressure as the latest quarter is a seasonally weak one. The weakness in performance is compounded by heavy capacity additions in 2025-26 (Apr-Mar), sub-optimal utilisation at new units. Factors like higher fixed-cost absorption, and incremental employee costs from implementation of the new labour codes will also impact sequential performance, according to Elara Securities.

 

Pharmacy distribution and digital health platform subsidiary Apollo HealthCo Ltd. is expected to report 14–17% on-year growth, driven primarily by the offline pharmacy segment, while losses in the digital business are seen narrowing.

 

HDFC Securities, Kotak Securities, and Nuvama Wealth expect 17% on-year growth in the December quarter for Apollo HealthCo. Kotak projects 16% growth in offline pharmacy distribution sales for the quarter. Kotak Securities expects Apollo 24/7 gross merchandise value to remain flat on quarter, while Nuvama Wealth sees a 6% on-quarter improvement to INR 7.6 billion.

 

Motilal Oswal highlights steady progress in the integrated online-offline pharmacy model and backend integration, while JM Financial and Prabhudas Lilladher point to lower losses from the 24×7 format, which should support consolidated profitability.

 

The diagnostics and clinics business of the company's other arm, Apollo Health and Lifestyle Ltd., is expected to deliver decent on-year revenue growth, driven by volumes, improving test mix, and expansion of organised diagnostics chains, according to analysts.

HDFC Securities, Kotak Securities, SMIFFS Ltd., and JM Financial broadly project 17-18% on-year growth for the segment. However, the on-quarter performance is likely to moderate, partly due to festive season impact.

 

MARGINS

Brokerages expect Apollo Hospitals Enterprise' earnings before interest, tax, depreciation, and amortisation margins to expand on year, driven by improved hospital profitability and a reduction in losses at Apollo HealthCo, even as quarter-on-quarter margin growth faces mild pressure due to seasonality.

 

Brokerages expect Apollo Hospitals' consolidated EBITDA margin for the December quarter to be in the range of 14.7–14.9%, reflecting broad consensus on year-on-year expansion, even as sequential pressures persist.

 

At the upper end of estimates, ICICI Securities, Kotak Securities, Nuvama Wealth, and Motilal Oswal peg margins at around 14.9%, driven by improved profitability in the hospitals business, better operating leverage at mature units, and margin expansion at Apollo HealthCo. Analysts also point to a sharp improvement in pharmacy margins, supported by scale benefits and a reduction in losses at Apollo 24/7, alongside tighter control over digital operating costs, which helps offset December quarter seasonality.

 

In contrast, HDFC Securities, Prabhudas Lilladher and SMIFFS Ltd. place margins at 14.7–14.8%, citing festival-led weakness in hospital volumes, sub-optimal utilisation at newly added beds, higher fixed-cost absorption and incremental employee costs, with SMIFFS also flagging a modest quarter-on-quarter margin decline due to festive season impact. Apollo Hospitals' December quarter EBITDA is projected at INR 9.3 billion, according to the average of estimates from nine brokerages.

 

Analysts will be awaiting the company's commentary on the status of Apollo HealthCo's demerger and any update on ongoing bed capacity expansion across hospitals.

 

Of the eight research reports on the company available with Informist, seven have a 'buy' or equivalent recommendation on the stock with an average target price of INR 8,824, which is around 23% higher than the stock's closing price on Friday, at INR 7,152.50. One brokerage recommended 'hold' with a price target of INR 7,570.

 

The stock has lost nearly 8% since the announcement of its September quarter earnings. At 0949 IST, the company's shares traded at INR 7,190.50 on the National Stock Exchange, up 0.5%.  

 

Following are the Oct-Dec earnings estimates for Apollo Hospitals Enterprise Ltd. from nine brokerage firms in the descending order by the estimate of net profit in INR billion:

Brokerage name	Net Sales	Net Profit	EBITDA
HDFC Securities Ltd	63.47	4.97	9.42
Kotak Securities Ltd	63.57	4.89	9.45
JM Financial Institutional Securities Pvt Ltd	63.46	4.86	9.46
Nuvama Wealth Management Ltd	63.84	4.81	9.48
Prabhudas Lilladher Pvt Ltd	63.23	4.68	9.38
SMIFS Ltd	61.71	4.60	9.07
Motilal Oswal Financial Services Ltd	61.26	4.56	9.13
ICICI Securities Ltd	63.79	4.47	9.50
Elara Securities (India) Pvt Ltd	62.79	4.38	8.98
Average	63.01	4.69	9.32

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Tanima Banerjee

 

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