Apollo Hospitals Enterprise Ltd
Investment Thesis
Over a 3-5 year horizon, Apollo Hospitals Enterprise Ltd. will achieve significant revenue and profitability growth, outperforming the Indian healthcare sector by leveraging its integrated ecosystem, expanding hospital capacity, and capitalizing on the rapid growth of its digital health platform.
Conviction History
Assumptions
Apollo Hospitals will achieve consolidated revenue growth of at least 15% YoY through FY27, driven by the addition of over 1,700 new hospital beds and increased patient volumes from government health insurance schemes like Ayushman Bharat.
EBITDA margins will expand to at least 15.5% by FY27, as operational efficiencies and a growing share of higher-margin digital services offset medical inflation pressures and limited pricing power in certain segments.
The Debt-to-Equity ratio will remain below 0.4x over the next 3-5 years, supported by strong operating cash flows and prudent management of capex investments.
Apollo Hospitals will successfully complete its planned addition of over 1,700 hospital beds by FY27, meeting projected capital expenditure targets of approximately INR 34,350 million for expansion.
No material governance failures, regulatory shutdowns, or existential risks will arise, allowing the company to focus on its growth strategy.
Inventory turnover will remain efficient, with days of inventory not increasing significantly beyond current levels, supporting cash flow generation from pharmacy and hospital operations.
Recent Developments
Apollo Hospitals partnered with Philips to integrate advanced technology for stroke and structural heart disease care across its network.
Apollo Hospitals achieved a milestone of 8,000 robotic surgeries within its Chennai surgical ecosystem.
Industry leaders at GBS 2026 confirmed AI's role in cutting healthcare costs and bridging talent gaps, aligning with Apollo's network-wide AI integration strategy.
Apollo Hospitals reported 28% YoY growth in international patient revenue for Q3FY26, successfully diversifying its patient base to Africa, West Asia, and Southeast Asia to offset a decline in Bangladeshi patient share from 30% to 8%.
Apollo Hospitals signed an MoU with Roche Diagnostics India to integrate the Navify AI Algorithm Suite across its 73-hospital network to enhance clinical decision-making.
Hospital stocks: Apollo, Aster DM, HCG, Fortis, Max rally up to 6% - Business Standard
Q3FY26 EBITDA grew 27% YoY with margins expanding 112bps to 14.9%, supported by a massive 4,444-bed expansion plan.
Subsidiary Imperial Hospital completed the 100% acquisition of Belenus Champion Hospitals for ₹1,650 million, with plans to expand it to a 175-bed multi-speciality facility by Q1 FY27.