Thank you, Rutuja. Good afternoon everyone, and thank you for joining us on this call hosted by Apollo Hospitals to discuss the financial results for the fourth quarter and full year of financial year 2026, which were announced yesterday.

We have with us today the senior management team represented by Mrs. Suneeta Reddy, Managing Director; Mr.

A. Krishnan, Group CFO; Dr.

Madhu Sasidhar, President and CEO, Hospitals Division; Mr. Madhivanan Balakrishnan, CEO of Apollo HealthCo; Mr.

Sriram Iyer, CEO of AHLL; Mr. Sanjiv Gupta, CFO of Apollo HealthCo; and Mr.

Obul Reddy, CFO of the pharmacy business. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties.

Please note the disclaimer mentioning these risks and uncertainties, which is on slide two of the investor presentation shared with all of you earlier. Documents relating to our financial performance have been circulated earlier, and these have also been posted on the corporate website.

I would now like to turn the call over to Mrs. Suneeta Reddy for her opening remarks.

Thank you, and over to you, ma'am.

Good afternoon everyone, and thank you for joining us for today's earning call. I trust you have had the opportunity to review the earnings material that we had circulated yesterday.

FY26 has been a strong year for Apollo, marked by healthy growth across all three verticals: healthcare services, Apollo HealthCo, and AHLL, alongside steady progress in our expansion agenda. During the year, we also announced strategic restructuring of the omnichannel pharmacy and digital health business, an important step towards sharpening focus and unlocking long-term value across our integrated healthcare platform.

The NCLT-convened meeting of the shareholders is now being called for on June 24th to obtain the requisite shareholder approval, consequent to which we are hopeful the demerger process is completed by quarter four FY27, as planned earlier. In terms of financial milestones, I'm pleased to share that our consolidated revenues crossed ₹25,000 crores for the first time, reaching ₹25,229 crores.

Apollo HealthCo also surpassed ₹10,000 crores in annual revenues for the first time, following a similar milestone achieved by our healthcare services business in FY25. These achievements underscore the scale, the relevance, and the growing strength of Apollo's integrated healthcare ecosystem.

Turning to our performance for the fourth quarter, consolidated revenue grew by 18% year-on-year to ₹2,606 ₹605 crores in quarter four FY26. Within this, the healthcare services business reported revenues of ₹3,268 crores, up 16% year-on-year.

This performance was driven by a balanced mix of 7% volume growth, 5% case mix, and the remaining 4% from price revisions. Surgical volumes grew by 7%, supported by a continued focus on oncology specialty: cardiac, oncology, neurosciences, gastro, and orthopedics.

These specialties remain key growth drivers for the business, delivering strong revenue growth of 22% year-on-year in quarter four FY26. Group-wide occupancy stood at 68% during the quarter, with established hospitals now at 69% and hospitals in metro at 71% occupancy.

This performance should also be viewed in the context of continued improvements in clinical productivity and operating efficiencies. The average length of stay reduced to 3.19 days from 3.3 days in the corresponding quarter, a decline of 3.3%.

The reduction was driven by significant adoption of robotics, minimally invasive surgeries, enhanced recovery and discharge protocols, and stronger clinical pathway standardization across the network. Importantly, the improvement in ALOS has been achieved while continuing to manage higher acuity and complex case mix, reflecting Apollo's alignment with global benchmarks in tertiary and quaternary healthcare delivery, where shorter hospital stays are enabled through technology-led interventions, evidence-care-based protocols, and superior postoperative outcomes.

Insurance and self-pay patients continued to account for 83% of inpatient revenues in quarter four FY26. Insurance revenues grew by 21% year-on-year, while self-pay revenues registered a growth of 13%, reflecting sustained demand across both segments.

Average revenue per patient stood at ₹1,87,208 in quarter four FY26, an increase of 9% year-on-year, driven by an improvement in underlying clinical mix. Within the healthcare services business, we delivered an ROCE of 25.4% for the year, supported by balanced performance across our network spanning metro, Tier 1, and Tier 2.

Apollo HealthCo reported revenues of ₹2,848 crores in quarter four FY26, representing a strong year-on-year growth of 20%. Revenues from Apollo Health and Lifestyle grew 24% to ₹489 crores.

Consolidated EBITDA for the quarter stood at ₹1,011 crores, registering a robust growth of 31% year-on-year. Within this, healthcare services EBITDA was at ₹781 crores, reflecting a 14% growth, while margins remained strong at 23.9%.

Established hospitals, however, grew their EBITDA margin to 25.5%, and EBITDA losses from new units in quarter four FY26 came in at ₹41 crores. Within the Apollo HealthCo, the pharmacy distribution business reported EBITDA of ₹195 crores, an increase of 20% year-on-year.

Within the online business, cash losses declined sharply to ₹16 crores, compared to the ₹80 crores in quarter four FY25. Consequently, Apollo HealthCo reported EBITDA of ₹156 crores in quarter four FY26 versus ₹36 crores in quarter four FY25, a significant improvement in operating leverage and business efficiency.

AHLL delivered a margin of ₹75 crore, representing a strong 58% year-on-year growth, with margins improving to 15.3% from 12% in quarter four last year. Platform GMV of Apollo 24/7 was at ₹528 crores in quarter four FY26, a growth of 20% year-on-year.

Digital revenues grew by 29% during the quarter on a like-for-like basis, after excluding the closure of the Amazon corporate partnership. We reported consolidated PAT of ₹529 crores, higher by 36% year-on-year, with significant improvements in PAT across all three verticals.

For the full year FY26 performance, our consolidated revenue was at ₹25,229 crores, representing a 16% year-on-year growth. Consolidated EBITDA was at ₹3,769 crores, reflecting a 25% year-on-year growth, while consolidated PAT grew 34% 34% year-on-year to ₹1,942 crore.

This strong performance for FY26 is despite the lower seasonal medical admission alongside moderation in international patient volumes, particularly from Bangladesh. Performance reinforces our ability to sustain growth momentum while maintaining financial discipline and operating efficiency.

As an important development, we announced yesterday that Apollo Cradle and Fertility and Cloudnine would combine to create one of India's largest integrated maternity and fertility care platforms. AHLL's mother and child fertility business are valued at ₹1,550 crores through a combination of cash and 9.9% equity stake in the combined entity.

AHLL will become the largest non-financial shareholder in the combined platform and will have board representation in the combined entity through a nominee director. Revenue of the Cradle and Fertility verticals was at ₹450 crores in FY26, with an I-GAAP EBITDA of ₹45 crores.

The transaction has therefore been concluded at a multiple of 35 times EBITDA. Spectra and the other assets of AHLL are not part of this transaction and will continue to remain in Apollo Health and Lifestyle.

This collaboration will accelerate access to premium maternity, fertility, neonatal, and pediatric care while raising the bar on outcomes, experience, and continuity of care. Apollo will bring its deep experience in this space to the combined entity to contribute to its growth.

Apollo remains deeply committed to expanding end-to-end—

Apollo remains deeply committed to expanding the end-to-end women and child healthcare platform, from prevention to high-risk pregnancy, neonatal intensive care, pediatrics, and lifelong wellness through its own integrated healthcare ecosystem across geographies. During FY26, our expansion initiatives progressed well.

We operationalized four new hospitals: Apollo Atena in NCR, Pune, Financial District in Hyderabad, and Narendrapur in Kolkata, with a combined potential operational capacity of 855 beds, which we are commissioning in a phased way, with 185 beds now operationalized, the remaining 670 beds planned over the next 12 months. As these hospitals continue to ramp up operations and scale specialties and clinical programs, we are also poised to commission two more hospitals: one in Sarjapur and the other in Gurgaon in the next two quarters.

In total, these additions are approximately 1,400 operating beds, all in key metro markets. This will position us strongly as we move into FY27, and later they represent nearly 25% capacity addition in these markets.

Alongside capacity expansion, we continue to deepen our clinical leadership through investments in high-acuity specialties: oncology, robotics, and advanced care pathways. Consumer engagement and technology adoption across physical and digital formats has also continued to improve, with increasing integration across hospitals, pharmacies, diagnostics, and digital platforms, reinforcing the strength of the One Apollo ecosystem.

On this note, I would like to hand it over to Krishnan, our CFO; Dr. Madhu Sasidhar, CEO of the Hospitals; Madhivanan, CEO of Apollo HealthCo; Obul Reddy and Sanjiv from Apollo HealthCo; and Sriram Iyer from Apollo Health and Lifestyle.

Thank you.

Hi team. Congrats on good set of numbers.

My first question is just a two points that

Hi team, thanks for the opportunity. My two questions are firstly on the hospital losses that we had talked about, ₹150 crore.

If you could update us on are we tracking onto that number? Which is the quarter where we see the most hit?

Our second question is on the digital break-even. Are we on track to deliver that in Q1?

On the first one, yes, I think we are sticking to our assumption that we will have a ₹140 crores loss. Most of this will actually happen in the fourth quarter where we would have opened out all of the facilities.

For the second question, let me pass it on to Madhivanan.

Thank you, ma'am. Good afternoon everyone.

Yes, as we speak, we finished this quarter pretty well and we believe that our growth story when it comes to GMV will continue both on the pharma side of the business and the diagnostic side. On the hospital consults also, the trends have been positive.

While Q1 would be a slightly more seasonal quarter for us, we expect that we should be very close to break-even or break-even very very soon. In Q1 itself.

We are on course.

Thanks for that team. Secondly, in the opening remark we talked about 1,400 beds, 185 already operational.

Could you give us a little bit of a roadmap that by mid of this year, by end of this year, how many beds will start adding to the revenue bit? That's it.

Thanks.

Yeah. Krishnan, take that.

Binay, as we speak, you know that this will be ramped up over the next 12 to 18 months, as we have said. As of now, it's 185.

We're hoping that by mid of this year, we will at least get this to 500, 600 beds before we even start Gurugram and which will then be a higher number. The way you should look at it is because Gurugram will start more towards the end of Q2 and the hospital in Bangalore will actually start in Q1 as well.

We will be operationalizing most of this in the next 12 to 18 months, as we have said. By mid of next year, think of it as at least around 500, 600 beds operationalized.

Thanks team. I'll come back in the queue.

Thanks.

Thanks for taking my question. My first question is on the hospital growth.

The established hospital growth has improved to about 13%, 14%, if I were to strip out the new hospitals. Should we assume that this growth improves given that we had low seasonality, the Bangladesh impact in FY26?

Post the margin expansion that we've seen in the established hospitals, is there scope for more improvement from the 25%, 25.5% that we've done in the last two quarters?

Yes, let me just come in. In terms of seasonality, there was a little bit of seasonality, but moving on to the next quarter, you will see an increase in occupancy.

I think just moving forward, there will be an improvement in established hospitals' margin. This will come from higher asset utilization as well as some cost reduction.

Madhu, you can add to that.

Thank you, Ms. Suneeta.

As Ms. Suneeta has indicated, the lack of dependence on seasonality is a fact that a lot of this growth has come from our investments in clinical program building and recruitment.

This has been geographically across the board. Every one of our broad markets has performed very well.

It has been a very strong performance, especially in our Tamil Nadu market, both Chennai and the rest of Tamil Nadu. As an example of the high-complexity work and the program building that we have done, in the fourth quarter, cardiac sciences grew by 19% and so did orthopedics by almost 20%, 19.9%.

I think this is a strong flywheel. It gives us momentum, and these are not one-offs or seasonal.

We also had some improvement in Bangladesh revenue compared to last year, as well as some diversified income from some new markets in Africa as well as in Asia. I think to your question regarding EBITDA, the strong performance in Tamil Nadu is very, very helpful.

Those are hospitals with very strong performance when it comes to EBITDA. While we have improved EBITDA margins in our established hospitals, we think there is scope for continued improvement.

We have improved our operating leverage, especially when it comes to some of the big cost heads.

Would you like to quantify how much more improvement we can bring through in established hospitals?

We don't guide, but I think there is an opportunity. I'll hand it over back to Ms.

Suneeta. No,

I think, AK, do you want to comment on that?

We have been saying that at least a 100 to 125 crores impact is further possible, and that is going to be something that we are working on both costs as well as operating leverage. We think that the margins can sustainably get to, as of now, if you look at the Q4 margins, it is at 25.5%, and we are hoping that we should be able to sustain that for the year.

Understood, sir. That's very helpful.

My second question is on HealthCo. We exited, I think, FY26 margins are at 4.3%, and I see the slide now mentions 6.5% to 7% as the exit margins for '27.

Other than the digital breaking even and possibly having positive EBITDA, could you just help us understand how we get to that? What would be the key drivers to get to that 6.5%, 7% margin for fourth quarter?

Thank you.

Sanjeev, you

will take that? Sanjeev will take that.

Yes.

Yeah. Thanks, Madhu.

Good afternoon, everyone. I think this is what we have been discussing last couple of earnings call.

We have a good potential in private label coming out of the storefront, which is the Apollo Pharmacy store. We strongly believe that further headroom is available on the private label, and that would be EBITDA accretive.

Similarly on the expenses side, also you would see that digital also has started coming down on the losses. We continue to believe that Q1 we would be very close to the breaking even.

Apart from this, the growth itself would provide a decent flow-through till EBITDA. We strongly believe that all these things put together and various other initiatives to increase sales and other things should help us to achieve what we have been guiding the street since last two, three quarters.

Sanjiv sir, out of the 250 basis points margin improvement that we're expecting, bulk of it would be from the digital losses and the rest would be private label and the integrated cost coming down? That's a fair assumption?

That's a fair assumption.

Thank you.

Okay. Thank you.

Hi. Good afternoon, and thank you for the opportunity.

First one on the hospital business. We continue to guide around ₹140 crore drag from the new hospital, and we are also suggesting that the drag is the most in this quarter with almost ₹41 crore.

If most of the operating expenses are already there in our number, then what is keeping us from commissioning the rest of the 670 beds, and why are we kind of waiting till the next 12 to 18 months?

No, two points. I think it's important that we're not saying that this ₹40 crores is the maximum.

Please let's appreciate that the peak can go up a bit, especially in Q2, etc., and then it can come down, and then Gurugram will also get opened. We are guided for the full year at ₹150 crores.

After all, we'll have to see how each of the hospitals ramp up, and we are quite aligned to the fact that for the full year, we should still be around that ₹150 crore number. The peak in a quarter can go up.

We will operationalize some of these as we see ramp up. Some of these have only been soft-commissioned.

Let's appreciate that, while we have done 185 beds, barring Pune, which is 75 beds which we have already commissioned, Calcutta has just got soft-commissioned, it's going to be fully commissioned in Q1. The Hyderabad was only recently commissioned, and so is Delhi just around a quarter back.

We will have to wait for some of them to commission fully because these are all preoperative costs that you're also seeing, and the business will ramp up over the next Q1 and Q2 period.

Sure, thank you for that. The second question for ma'am on the deal that we have announced for Apollo Cradle.

My understanding was that we were doing quite well given that in this format, we had presence in our key markets. Beyond let's say merging and achieving the number one scale, what do you see in this deal?

Is it the valuation that we are getting, was it non-core for us, we didn't see a lot of value? How have you looked at this?

No,

I think it's a combination of factors. One is the valuation, which is clearly key to get a valuation of 1,500 for an EBITDA at a multiple of 35 in this market is something that you cannot ignore.

Second, the format that fits Apollo is the deeply integrated mother and child platform, which we will continue to grow in key markets. That is the format that we will grow, and

Hello?

Third point Hello?

Ma'am, we lost you at the format thing.

What is our format? The mother and child format like we have in Chennai, which looks after the entire requirements of the mother as well as the child, and is deeply clinical in terms of we look after the child up to the age of 16.

There is a huge difference in terms of value that you get from that, the revenues, the margins. There's a huge difference in all of these parameters.

We will continue with that approach to mother and child. The third is that, of course, that cash that we get, ₹750 crores, will be deployed in primary care.

We have already built out a primary care platform that has clinics and diagnostics, but we believe that we have to be leaders in this platform because this will be the funnel to Apollo and it will look after patients who are currently not in our system and who are not very sick. It is part of our strategy for preventive, for looking after all the requirements of all of our customers.

Just lastly, ma'am, will our clinics still continue to carry Apollo brand name, or their brand name will change?

Yes. All the clinics, everything else is Apollo brand name.

Only the Cradle will carry that for 1 year, and then it will become Cloudnine.

Okay. Sure, I have more questions, I'll join back the queue.

As to be on the same page, the AHLL business, as is an ₹1,865 crores revenue business for this year. ₹450 crores is the Cradle plus fertility number out of this ₹1,865 crores.

This is what has got transferred and combined into Cloudnine. It's only the Cradle and IVF business.

All others continue. We are going to be doubly focusing on Apollo primary care and diagnostics, as well as other specialty cares as Ms.

Suneeta already said, which is the Spectra, dialysis, and the others.

Thank you for taking my question. Karan here.

First question is with respect to the pharmacy business. Is it fair to assume that I think we've mentioned this, but just double-checking the private label contribution going up is the primary or the sole reason why our offline pharmacy margins have been as strong?

That's one. The second sub-part would be for the Apollo 24/7 reported break-even, right?

While cash break-even, we are on track. Any color on reported break-even timelines will be helpful.

Yeah.

Krishnan, Sanjiv?

Maybe let me just take the digital question first, ma'am, and then Obul sir can talk about the offline business. In the last earnings call also, we guided that the first milestone would be to have a Q1 breaking even without ESOP cost, so that should happen in Q1.

We also suggested that by Q3, we should be able to break even including the ESOP cost. That's a second milestone we're looking at it.

From there upon, the journey is to make sure that we increase our EBITDA in absolute terms quarter-on-quarter. I think with that in mind, I think we should wait for these two milestones to hit first, and then there upon, we can further discuss about to what an extent digital business will add on to the absolute EBITDA on the AHLL.

Yeah. The pharmacy offline business, as we have been seeing continuously margin expansion, driven by the higher private label, and we are also working on the entire spectrum of purchase-level margins and cost management, and we could see that improvement continues going forward.

Okay. Also where does this settle?

What could the normalized or the more steady-state margin look like? Is it 8%?

Is it 9%, 10%? Any color there?

At a more mature stage with high level of private label, we could see somewhere between 8% and 9%.

Got it. Do we have any GLP-1 related benefit in our pharmacy business or any

We are working on some 2, 3 focus areas, and that will be one area to work now. We have some specific focus on those areas.

We will update you later.

Got it. Helpful, thank you.

Hi. Thanks for the opportunity.

Firstly, just reconfirming in terms of beds that will get commissioned over the next 2 years, should we assume most of the 1,400 beds which are yet to get operationalized, all of those will get operationalized by fiscal '28?

Yes, that will fully get operationalized by FY28. Let me reemphasize that the structure is all getting constructed, and it will all be ready as we commission it.

Some of them, other than the phase two of Pune where the construction is on, all of these constructions will also be ready by Q2 or beginning Q3 of this coming fiscal. There is no reason for us to not open all these up by FY27 FY28.

Therefore, if one has to think about losses, fair to assume then by fiscal '28, your cumulative losses or you could actually see break-even or probably much lower number of loss?

At least the break-even to begin with by FY28.

All right. Then secondly, when I look at AHLL performance, obviously it has been very, very strong.

Within that, diagnostics particularly has done very well. If you could tell us what has driven this very strong growth and is this sustainable?

Secondly, also on margins of AHLL, 15% margins that we've seen, it's a very strong up-move. Any one-off elements here, or is this the new base?

Sriram? Sriram?

Sriram on call? Sriram, are you on the call?

AHLL. No, AK, you take that, AK.

I think we have seen that there has been a structural shift that we have seen in the overall diagnostics, because they are looking at increased lab utilization as we speak. Also within each of the markets, they are seeing how they can work on B2B business also along with the B2C that they are focusing on, which is why the growth is something that they've been able to show and it will be sustainable.

We'd alluded in the past that we've been reinvesting in this business. Fair to assume that we are towards the end of it, or do you still see us reinvesting or growing the diagnostics business?

We definitely plan to grow the diagnostics business. We are amongst the top four players now in the country.

The potential on diagnostics is significantly higher. Having bought out IFC at the first stage, and now with combining the Cradle business with Cloudnine, there is a strong intent to double down on the primary care and diagnostics in each of the metro markets and the non-metro markets as well, because it's also a strong outreach for the Apollo brand, and you will see us accelerating on this front.

All right.

Hi. Thank you for the opportunity.

Two questions. First, in your new hospitals which you have started in last few months or so, what has been your experience in terms of onboarding insurance partners?

Then I think what we have heard from few of your peers that the negotiations etc. are taking longer.

What has been your experience there?

Just to answer that, I think we've been quite fortunate in onboarding insurance partners, which is why we are seeing some traction. Of course, with the way the things are, it takes a little bit more time, but Apollo Atena has six high-volume insurers already supporting it.

Our Pune hospital has three of them, and we've just closed out Star Health. In Kolkata also, we've got six high-volume insurers.

Hyderabad has four high-volume, and we're just closing out Care and Star, it would be six. Including Bangalore, we have three of the top eight.

We're all set in terms of partnership with insurance companies.

There has been no issue, right? Unlike faced by some of other players, you've said you have been very successful in onboarding these insurance companies in express manner?

I believe we have good partnerships, and we will continue to strengthen them.

Okay. That's good to hear.

My second question is on your Apollo 24/7 business. While digital losses continue to reduce and you're likely to achieve break-even very soon, but if you can comment on the gross merchandise value trends, I think on quarter-on-quarter basis again, it's more or less similar to what we saw last quarter.

Then if you can share some updates on the recent services there like hospital connect, insurance, etc.? That will be helpful.

Thank you.

Madhi, please take this.

Yes, ma'am. Yeah.

Can you hear me?

Yes.

Yeah. This particular current year was driven primarily on an operating model change, which was effectively not to depend on paid marketing from a customer acquisition perspective.

I think we have been able to establish that engine wherein we are able to get new customers between 20% and 30% without actually spending too much of marketing money. That's one area which has got established on the pharma side of the business, which is our primary mainstay.

On the diagnostic side again, I think both from a cross-pollination perspective, as well as our ability to use what we call as an omni-asset has helped the diagnostic business what we do through AHLL, again grew at around 25% to 30%, and we believe both these engines are sustainable without spending too much of marketing money, we will continue. While we might not grow at 80% and 90%, between 25% to 35% is a growth in terms of new business we are confident of.

On the doctor consult business, we have a much stronger framework within which is the hospitals and the clinics, and that's also an engine which is building up slowly. While this year the growth was not very huge, we have reset it and that should also play out in the coming year.

On the cost front, while we have almost hit the base, we still feel there is a certain amount of efficiency which we will lean out. As we go as a combined entity by the end of this year, there will be some more cost elements which will bring in.

Both in terms of growth and in terms of EBITDA, the bottom line level, it would be what I would call as a calibrated business. There is one area, actually two areas in which we continue to invest and they could be a bit of a drain because we treat all of them more as OPEXs.

One is the insurance business, which we have started off with on a good footing on the healthcare. Like I told last quarter, there was a bit of a change in the way the numbers figure out.

Some of our revenue has got staggered to be back-ended. We believe in the next two quarters, that model will also stabilize.

Second area is, we continue to invest in our technological assets: PHR, Ask Apollo, which is integrating with multiple partners, so that also remains at a cost, but both of them are costs which will help us in the long run. That's the broad commentary in the way we expect FY27 to happen.

Happy to clarify any questions.

That's very helpful. Just I think a follow-up.

How much more investment you look for these areas? You mentioned insurance and technology.

Any number which you can share? Understood.

Sanjiv, if you can just say what has been our cost structure that we have been investing on and whether it's continuously coming down, but there is still a little bit of investment. Sanjiv, if you can just throw some light on this, please?

Yeah. I think if you're referring to our investment into AI technology as well as on the insurance side of it is concerned

Yeah.

Sorry.

That was the question.

Okay. No problem.

Yeah. We are expecting roughly between 6 to 7 crore on a quarterly basis, and that's also is helping us a lot in reducing our cost by the way AI tools in the customer call center helps us to improve the productivity and reduce our expenses.

Broadly speaking, I think that is the level of expenses that we are looking into these two sides of the business. You also checked on one point related to the margins, to what an extent margins can go up in digital.

I think it's too early to specify a particular percentile, but I think the way insurance business is increasing, more of diagnostic business We saw a very high growth in diagnostic business last year, and we continue to do with that. A better diagnostic mix, high insurance, and more circle programs and ad monetization will only strengthen the existing margin profile.

A little too early to say that how we end up current fiscal year, but I think where we are standing today, we should be in a better place as you see quarter-on-quarter with respect to our numbers. Thank you.

Thank you.

Yeah. Thank you for taking my question, and congrats on management on good numbers.

The first question I have on Tamil Nadu region. This quarter also for full year, it has performed well.

Going into next year, there is limited bed addition or no bed addition, basically. Occupancy is already at 68% for the region, plus the volume growth for this year has been pretty tepid.

The average revenue per patient will remain the sole growth driver for this region going ahead? Is there a scope for the asset mix or case mix to improve?

Madhu, let me take this first. First, in terms of headroom for growth, there is definitely an additional 6% to 7% headroom for growth in Tamil Nadu.

Hello?

No. I said in terms of headroom for growth, there is definitely additional capacity, not just in our main hospital, but in the other hospitals in the Chennai region is another 7% uplift that can come from pure occupancy.

With regard to case intensity and improving ARPP, we will continue to focus on that. We have very high-end clinicians and probably the finest technology in the world in this region.

You could see an improvement in ARPP and case mix. I think both on asset utilization, headroom for growth, and ARPP, there will be continuous improvement.

Sure, ma'am. Thank you so much.

The second question I have, if we can provide the OCF and FCF generation for hospital services segment for FY26? Also the CAPEX which we have given, ₹1,980 crore for 1,000 beds for FY27, should we assume that the entire CAPEX for FY27 or some of it has already been spent?

Thank you so much. Yeah.

AK, take that, please.

The operating cash flow before dividend that we have generated this year is before the dividends at the consolidated HCS level alone, it would be in the region of ₹1,850 crores. That is before the dividends.

After the dividends, it would come in the range of ₹1,550 crores, which means that's after our recurring CAPEX, which is used for hospitals, which continues at around ₹550 crores. This also includes our taxes paid during the year, as well as the working capital.

It's after all of this, which means the entire 1,550-odd crores is really redeployable for growth CAPEX fully. This is the number that we are quite comfortable continuing into the coming year also.

We don't think that our number would be significantly higher than this number in the coming year for growth CAPEX.

Hi. First question on the financials.

On a quarter-on-quarter basis, I see that we moved from net cash to net debt. The difference is almost ₹1,200 crores.

I guess ₹400 crores would be a new CAPEX. What would account for the remaining ₹800 crores?

We also paid off IFC this quarter. This was a 1,250 crores payout that we had in this quarter just to remind you.

This came out out of the healthcare services balance sheet. We did pay 1,250 to buy out IFC at AHLL, just to remind you.

That was one of the reasons for the spike in this quarter. Otherwise, now it will get normalized to the projects.

Got it. Just one clarification.

You said you will break even in FY28 on the new beds that have been commissioned. Is that the remaining 670 beds will be spread over a period of 18 months.

I'm just wondering, and 855 more beds will be commissioned or could be commissioned sometime in the next couple of years. Just want to understand the assumptions behind this.

Typically, when we at a at a 50% occupancy level is what 50% to 55% occupancy level on the entire stock of 1,500 beds is what we would be breaking even. In each of the hospitals, at that levels of occupancy, we expect to break even break even as we as we speak.

We are quite, the given that each of these hospitals are going to be staggered in their expansions and there are certain hospitals which will get mature by Q4, not mature, I'm saying they will probably become break-even by Q4 of the coming fiscal, and some will be in the in still in that burn mode. In FY28, as of now, we believe that all the hospitals put together should be break-even.

There will be positives and negatives in that. A few negatives and a few positives, but then overall as a new hospital cluster, we would expect FY28 to be break-even.

That includes Gurgaon, Sarjapur, all these hospitals that are going to be commissioned in FY27?

Yes, which includes that, but as I said, Gurugram itself may probably be in a bit of a lost position, but some of the others will become positive soon. Let's also appreciate that Sarjapur and all are good markets for us, existing markets in Bangalore.

Is Gurugram and a market that we know of with good doctors. Hyderabad also is a market that we've already hired the right set of doctors, and we're quite confident that the overall ramp-up should be good one over the next two, three quarters.

Ladies and gentlemen, if you could excuse me. I have a bit of an emergency, and I will hand over this call to AK to answer any remaining questions.

We commit to stay connected with you. Feel free to reach us either by email or Zoom, but the team remains committed to answering all of your questions.

Thank you for your patience, and I look forward to our next call. AK, I'm handing it over to you.

Sure, we will take it forward. Thank you so much.

Operator, carry on, please.

Hi, thank you for the follow-up. AK sir, can you kind of consolidate all the outlook that we have provided business segment-wise for FY27 in terms of revenue growth and profitability?

That will be offline, because clearly each of the businesses are on different growth rates. As we said, at least at the highest level, we have said that the hospital businesses we should look at a mid-teen growth into FY27.

We have shown a good quarter end, and into the coming year, you should see a gradual acceleration of the revenue with all the new hospitals contributing, as we said. We have guided that the overall healthcare services margin should still improve from the current levels by at least 100 basis points into next year, which is the established units.

We have guided you that ₹150 crores is what we would for now look at for the overall hospitals business next year as the EBITDA loss. AHLL, we're continuing on the growth momentum.

Apollo HealthCo, we've already given an overall guidance on the pro forma basis, which Madhi can reaffirm, that we have said that in the pro forma basis, which we have seen a ₹19,000 crores of revenue for the pro forma basis including distribution, we have said that we would be getting to a ₹25,000 crores run rate by Q4 of FY27 with a 6.5% to 7% EBITDA margin. Madhi, you can confirm that as well.

Yes, AK. I think we'll reconfirm that.

We are very much on the task, like last year we grew between 19.5%, reasonably confident of growing at 21%. On the top line bit, we are on course to be going towards ₹25,000, whether it be opening new outlets in our distribution side, some of our new stores maturing up, the trend is visible.

I think the biggest lift will come the moment the digital business breaks even and then starts contributing to the EBITDA story, because if you have to look at the cost structure, that is something which is reasonably, and this growth should be able to sustain that. We would be very confident that we are on course on the pro forma side that we have published.

Sir, a follow-up. Can you update us on the timeline for this entire transaction on AHLL and when will the new company will come into existence, and when will the separation of the demerger will happen?

As we said already, that the shareholders' this thing is scheduled for June 24th, which is the NCLT process, convened process, where once we get the shareholder approval of AHLL, we would go back to NCLT and then the NCLT process should take it to some 3, 4 months to close. Hopefully by Q4 FY27, end of December or early Q4 FY27, is when Apollo HealthCo should get demerged and listed.

That's the plan. That company, when it gets listed, you should be in a position to see that ₹25,000 crores of revenue by that quarter, annualized revenue.

Sorry, could you hear me now?

Yeah. Thank you for the opportunity.

Just a clarification on 24/7. When you mentioned Q1, Q2 reported profit including and excluding ESOP, what is the run rate of ESOP expense that we are looking at for next 1 year?

I'll give the answer. Roughly in the range of about 50 crore is what we are looking at the overall ESOP cost for the current fiscal year.

You might experience about 22, 23 crores for Q1, but after that, it will start tapering down. Overall for the year should be in the range of about 50 crores.

Thank you.

Got that. Sorry if I missed, but I just wanted to check on this Cloudnine transaction, when are we expecting it to be completed and in terms of reporting, when should it be reflected in our AHLL numbers?

Sorry, what was that question? We didn't quite hear it here.

Was it for 24/7?

It was for AHLL on the Cloudnine transaction. Post this transaction, when are we expecting it to be reflected in AHLL numbers?

It should be consummated Sriram, are you there?

I'm here. As the deal has just got concluded yesterday, I think as next steps we'll have to go and apply it.

Once we get the approvals, which we expect to come in next couple of months, after that, the formal commercial transaction will happen.

Maybe by end of one more quarter. We expect the CCI approval to come in place, and then the whole transaction should itself get consummated.

In Q2, we should have that reflected, sometime in Q2.

Yes. Sometime between August, I believe.

August or September, yeah.

Got it. This is really helpful.

Thank you so much.

Thanks for taking my question, sir. On the 24/7 platform, can you give us a sense of some of the operating metrics which are there on user metrics?

How does this compare with some of the other larger digital platforms right in the number of online transactions, number of users on a daily basis?

Let me take the question. Typically, there are two peers that we compare ourselves with.

One is the quick commerce, especially when it comes to the medical pharma

Can you hear me now, better?

Okay. No.

The most important thing that we look at is the new customers that we are acquiring on a month-on-month basis, and we compare it vis-a-vis our peers like Tata 1mg and PharmEasy. Again, like I told you earlier, what is important is not just the growth which is coming through new customers, but at the CAC at which we are acquiring it.

We are in a good position. We are able to do around 200,000 to 220,000 on a month-on-month basis.

We expect this number to go up as we are building some very strong synergies with our 7,500 outlets, both in terms of originating the customer, as well as building the delivery. The second big thing is our ability to deliver at least 90% of our orders in the same day.

We follow two metrics. One, which is called the same-day delivery, which is 90%, and the insta delivery, which runs between 19 minutes to let's say an hour.

That's another metric. We try to bring it down.

We try to target bringing it in the range of around 50% to 55%. All this needs to happen with a cost of delivery on a constant downward trend.

Again, we are reasonably on par with some of the peers. It's been showing a downward trend, and that's how our unit economics has become more and more positive.

The final thing that we usually track is also the number of markets in which we have been able to provide our insta business. Suffice it to say, the 30% growth that we have been establishing is primarily coming from our top five markets, the top six metros minus Mumbai.

These are the numbers. Once this model gets established, we have enough potential to roll it out into new markets, and then play it out as we go along.

In all this, unlike growth at any cost, we are very much focused on a sustainable model wherein we will be able to justify. These are some of the broad metrics that we look at.

Our AOV, which is average order value, etc., are on par with the industry, sometimes even better, given the fact that a big base of our customers is chronic customers. Yeah.

I'll stop here. There are enough other metrics which we track, but these are the ones which should be fair and should give a directional position.

Just to sort of build on that, on the daily consultations that you talked about of 15,000 or thereabouts, how has this number trended and how do you see this playing out? How big a funnel is it for your medicine orders and sample collections?

Correct,

that's what I was highlighting. Two things.

One, the digital consults has been where we compare ourselves with people like Practo, that business has been growing at a reasonable speed, say around 15%, 20% growth. I think the bigger story will play out as we go along for the physical appointments that we help facilitate for our hospitals and clinics.

That number has started showing some very positive trend in the last 1 to 2 months. We expect that engine to drive further.

The diagnostic business, however, derives more from a pharma business cross-pollination. People who are already very core customers of ours on the pharma business, we try to track them on the basis of the cross-pollination between pharma and digital.

Both on the omni side, which is both digital and offline, that number is also showing a trajectory. In fact, last year, we had a very big jump.

We expect a similar jump along with AHLL to build that agenda as we go along.

Sir, on that point, on diagnostics, is there a number If we give a gross sales number, but how much would that be captive sales to the Apollo Hospitals group and how much would be net sales to third parties? Outside of the hospital network.

We don't do third-party at all. Our business is primarily driven by AHLL.

Most of our business, why most, 100% of the business is exclusively delivered through AHLL on the diagnostic side and the hospital consults through both clinics of AHLL and the hospitals. We don't have any third-party business.

The entire core business is driven by the Apollo ecosystem.

Hello. I had a question regarding the associated company, Indraprastha Medical.

There is a legal case which is going on with the company with the Delhi government. Does it have any implication on our holding in the Indraprastha Medical, whether the case goes in our favor or goes against?

No, Indraprastha we have taken this up with the government as well because even whatever they have said, we're quite confident that we should be in a position to take this to a logical conclusion because the lease is automatically renewable there and the free bed obligation is also been done by the company also. As the shareholding anyway continues.

Okay. Any possibility of increasing taking Delhi government stake of 26%?

No, nothing as of now. Nothing for now.

Okay. Thank you, sir.

Hello? Good afternoon, sir.

Hello?

My questions are answered. Thank you.

Thank you so much, everyone, for the call. As we commence FY27, we believe we are entering the next phase of growth with very strong fundamentals across all the three lines of businesses, a visible expansion pipeline, and continued progress in clinical excellence, technology, and digital health.

Our focus remains on keeping the consumer at the center, delivering superior clinical outcomes, improving access to quality healthcare across formats, and creating sustainable long-term value for all stakeholders. If you have any questions, please reach out to us and we're happy to answer any of them.

Thank you again.

Thank you.