Apollo Hospitals Enterprise reported a strong fourth quarter, with broad-based growth across hospitals, pharmacy and diagnostics, even as expansion-related costs are expected to weigh on margins in FY27 before easing in FY28. Consolidated revenue rose 18% year-on-year to Rs 66.06 billion, while recurring PAT increased 36% to Rs 5.29 billion, reflecting healthy operating momentum across the business.
Hospital revenue grew 16% year-on-year to Rs 32.7 billion, supported by a 9.2% rise in average revenue per patient, stronger volumes and a richer case mix. Surgical volumes increased 7%, and CONGO-T specialty revenue climbed 22% year-on-year. Group occupancy stood at 68%, while established hospitals operated at 69%, and hospital EBITDA rose 14% to Rs 7.8 billion, although margins narrowed to 23.9% because of a Rs 410 million drag from four newly opened hospitals.
Apollo HealthCo delivered another solid quarter, with pharmacy revenue increasing 20% year-on-year to Rs 28.5 billion. Offline pharmacy sales rose 21% to Rs 25.2 billion, supported by a stronger mix and improving profitability, while the digital business continued to narrow losses. Apollo 24/7 GMV grew 20% year-on-year to Rs 5.28 billion, while operating expenses fell 36%, bringing digital losses down to about Rs 160 million in the quarter from Rs 800 million a year earlier.
AHLL, the diagnostics and clinics business, also posted a sharp improvement in profitability, with Q4 EBITDA of Rs 750 million and a margin of 15.3%. Apollo said it completed the IFC buyout during the quarter and reached an agreement on the Cloud Nine transaction, under which the Cradle & Fertility business contributed around Rs 4.5 billion of revenue and Rs 450 million of EBITDA in FY26. As part of the deal, Apollo will receive cash and a 9.9% equity stake, with CCI approval expected in about two months.
Looking ahead, management reiterated an aggressive expansion plan, with about 1,400 beds expected to be commercialised by FY28, including roughly 900 beds in FY27 and the balance in FY28. Four hospitals that started operations in FY26, Apollo Athena in NCR, Pune Financial District, Hyderabad and Narendrapur, together add potential capacity of 855 beds, of which 185 are already operational. FY27 expansion capex is guided at around Rs 19.8 billion for about 1,000 beds, and new-hospital losses are expected to peak before tapering, with break-even targeted in FY28 at about 50%–55% occupancy.
Equirus Securities said the ramp-up should add around Rs 8 billion in incremental revenue but also about Rs 1.5 billion in new-hospital losses in FY27, resulting in an estimated 150 basis points of margin compression versus FY26. The brokerage retained a LONG rating and said its Mar-2027 target price is Rs 9,444. It expects margin recovery as new hospitals scale, established units improve occupancy and Apollo HealthCo continues to reduce digital losses.
Management expects mid-teen revenue growth in FY27 and sees scope for margin expansion in established hospitals through better occupancy, tariff mix and specialty mix. Pharmacy growth is expected to be supported by around 600 store additions per year, mid-teen same-store sales growth and high-teen online GMV growth, while Apollo HealthCo is targeting a Rs 250 billion revenue run-rate by Q4 FY27 and an EBITDA margin of 6.5%–7%. Digital breakeven is expected by FY28, supported by lower losses and operating leverage.
