Apollo Hospitals Q3 Profit Surges 35%, Plans Business Demerger

HEALTHCAREBIOTECH
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AuthorVihaan Mehta|Published at:
Apollo Hospitals Q3 Profit Surges 35%, Plans Business Demerger
Overview

Apollo Hospitals reported a robust Q3 FY26, with consolidated revenue up 17% YoY to Rs. 6,477 Crore and PAT soaring 35% YoY to Rs. 502 Crore. The healthcare giant declared an interim dividend of Rs. 10/share and greenlit a strategic demerger of its pharmacy and digital health businesses to unlock value. All business verticals showed strong double-digit growth, supported by capacity expansion and network growth.

Apollo Hospitals: Strong Q3 Performance Fueled by Diversified Growth and Strategic Demerger

Apollo Hospitals Enterprise Limited has posted an impressive financial performance for the third quarter and nine months ended December 31, 2025 (Q3 FY26 and YTD Dec FY26). The consolidated revenue climbed 17% year-on-year (YoY) to Rs. 6,477 Crore in Q3 FY26, showcasing broad-based strength across its operations. Consolidated EBITDA demonstrated robust growth, rising 27% YoY to Rs. 965 Crore, leading to a significant 35% YoY jump in consolidated Profit After Tax (PAT) to Rs. 502 Crore.

📉 The Financial Deep Dive

  • The Numbers:
  • Q3 FY26 Consolidated Revenue: ₹6,477 Crore (+17% YoY)
  • Q3 FY26 Consolidated EBITDA: ₹965 Crore (+27% YoY)
  • Q3 FY26 Consolidated PAT: ₹502 Crore (+35% YoY)
  • YTD Dec FY26 Consolidated Revenue: ₹18,623 Crore (+15% YoY)
  • YTD Dec FY26 Consolidated EBITDA: ₹2,758 Crore (+22% YoY)
  • YTD Dec FY26 Consolidated PAT: ₹1,412 Crore (+34% YoY)
  • Segmental Strength: All key verticals reported healthy expansion. Healthcare services revenue grew 14% YoY, while Apollo Health and Lifestyle Limited (AHLL) and Apollo HealthCo (digital healthcare and pharmacy) each saw 20% YoY revenue growth in Q3 FY26.
  • Exceptional Items: An exceptional item of ₹19.2 Crore (Consolidated) was recognized due to adjustments in gratuity and leave liability arising from the implementation of new Labour Codes. Standalone exceptional items stood at ₹11.4 Crore.
  • Shareholder Returns: The Board declared an interim dividend of ₹10 per share (200% of face value) for FY2025-2026, signaling confidence in continued profitability.

🚀 Strategic Analysis & Impact


  • The Event: The Board approved a Composite Scheme of Arrangement for the demerger of Omni channel pharmacy distribution and digital health platform businesses into a new entity. This strategic move is designed to unlock intrinsic value, enhance operational focus, and potentially attract targeted investments for these high-growth segments.

  • The Edge: The demerger positions the core hospital business for dedicated focus while allowing the digital and pharmacy segments to pursue their growth trajectories independently. This structure is expected to improve capital allocation efficiency and strategic agility.

  • Operational Milestones: Apollo Hospitals continues to invest in its physical infrastructure with the launch of a new 250-bed quaternary care hospital in Pune. The pharmacy network expanded to 7,113 stores, adding 185 net new outlets in the quarter, underscoring the aggressive growth in its retail and digital footprint.

🚩 Risks & Outlook


  • Specific Risks: Integration challenges post-demerger and execution risks associated with rapid capacity expansion and network growth are potential headwinds. Increased competition in the digital health and pharmacy space also warrants close monitoring.

  • The Forward View: Management expressed optimism regarding its integrated care model and investments in clinical capabilities. Medical Value Travel is identified as a significant long-term opportunity. Investors will watch for the successful execution of the demerger and the continued growth momentum across all business verticals, especially in the digitally-led pharmacy segment.

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