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Apollo Hospitals Enterprise Ltd (AHEL) announced strong financial results for the fourth quarter of fiscal year 2026, showing continued growth across its hospital, diagnostics, and digital health services.
Hospitals Segment Drives Growth
The company's core hospital division reported a 16 percent year-on-year increase in revenue to Rs 3,268 crore, with EBITDA rising 14 percent to Rs 781 crore. Higher average revenue per patient, a more complex case mix, and increased clinical intensity contributed to this growth. In-patient volumes rose 7 percent, and established hospitals achieved improved EBITDA margins of 25.5 percent.
Diagnostics and Digital Healthcare Show Promise
The Apollo Health and Lifestyle Ltd (AHLL) segment, which includes diagnostics, dental, dialysis, and fertility services, demonstrated a significant turnaround. Revenue climbed 24 percent to Rs 490 crore, and EBITDA surged 58 percent to Rs 75 crore, largely driven by a 52 percent jump in diagnostics revenue. AHLL expanded its diagnostics network, adding 279 new collection centers and 10 satellite labs.
A key strategic development is the proposed merger of Apollo Cradle and Apollo Fertility with Cloudnine Hospitals. This deal values Apollo's mother-and-child and fertility business at nearly 35 times EV/EBITDA. AHLL will receive approximately Rs 1,550 crore in cash and a 9.9 percent equity stake in the combined entity, aiming to create a leading integrated maternity and fertility care platform in India.
The omni-channel pharmacy and digital platform, Apollo HealthCo, also advanced, with revenue growing 20 percent to Rs 2,848 crore. Operating losses for Apollo 24/7 narrowed to Rs 73 crore from Rs 114 crore in the prior-year quarter, reflecting better cost management and monetization efforts. The Apollo 24/7 ecosystem now serves over 47 million registered users, with around 15,000 daily consultations.
Ambitious Expansion Plans
In fiscal year 2026, Apollo Hospitals opened four new hospitals, adding 855 beds to its network. The company's medium-term strategy includes expanding its total bed capacity from the current 9,620 to nearly 13,100. This expansion will involve greenfield and brownfield projects, as well as asset-light initiatives, focusing on major metropolitan areas like Mumbai, Chennai, Bengaluru, the NCR, and Hyderabad.
Outlook and Valuation
Analysts maintain a positive outlook for Apollo Hospitals, citing strong occupancy, increasing clinical complexity, aggressive capacity expansion, and improving digital venture profitability. The stock is trading at approximately 26 times its estimated FY27 EV/EBITDA. Analysts believe the company's integrated healthcare model, disciplined expansion, and strengthening cash flows support an 'Overweight' rating.