Bangladesh and quick-commerce overhangs disappeared by Q3FY26.

On 24/7 - operating costs ex-ESOPs were down ~16% QoQ driving better profitability, but GMV is down ~14%. How should we look at GMV growth ahead given the breakeven target by end of fiscal? Also update on newer services like insurance and corporate tie-ups.

On the cost front, biggest driver was unit economics improvement - customer acquisition charges, discounts and lifecycle/delivery cost. At CM1 we are almost at break-even for pharmacy. On GMV, we restated numbers because for the hospital IPOP/consult business we now focus only on new customer business. On a like-for-like basis we grew 8% sequentially and 23% YoY. For breakeven, the GMV number could move from Rs. 800-900 crore earlier guided to maybe Rs. 50-100 crore higher due to readjustment.

On competition - some e-com platforms have stepped up aggressively in OTC, wellness and now prescription medicines. How do you see this competitive dynamic?

All this action started just from this month with two quick commerce players entering the prescription business. We will watch but believe this is good for the overall industry. Digital pharmacy is currently 12-15% of offline pharmacy and should settle at 25-30% as the market matures. Apollo with its strong trust, supply chain and 6,500+ outlets will hold on in the long run. We will not chase customer acquisition at any cost but build a sustainable business focused on Tier 2 and Tier 3 cities.

On the 9% ARPP growth, can you split this into case mix, payer mix and price increase contributions?

Tariff/price effect averaged about 4-5% YoY. The remaining comes primarily from case mix, driven by Congo specialties (cardiac, oncology, neuro, gastro, orthopedics). Gastro sciences and orthopedics grew 16% and 17% YoY. Within Congo specialties, ARPP grew in healthy double-digit numbers across each.

On payer mix - is more cash growth versus insurance, since cash is typically slightly higher realisation?

On a volume basis, payer mix growth has been highest in insurance at 7.8%, followed by cash at about 5%.

Confirming the 700 beds for FY26 - is that out of 1,577 beds slated this year? And when does the next 800+ beds tranche operationalize?

Yes, 700 beds in FY26 out of the 1,577. The next tranche follows in FY27.

On the GMV redefinition - in Q4 you guided revenue/GMV ratio of 45-46% for full year vs 36% in FY25. Any update with this redefinition? And is breakeven still at Rs. 800-900 crore?

No change to the 45-46% revenue/GMV tracker - revenue definition remains unchanged. On breakeven, at GMV of around Rs. 800 crore the digital revenue will be hovering between Rs. 90-100 crore which is the breakeven indicator.

Now that Bangladesh patient flow disruption is in the base, will hospital growth inch up from 10-11% to mid-teens with bed additions?

Yes, growth will go up. Existing assets can deliver 13-14%, with an additional 10% coming from new facilities over the next two-three years as there is headroom for growth in existing hospitals.

Occupancy doesn't seem to be improving and ALOS has declined. How will this be reflected in operating metrics? And is there room for margin expansion before new hospitals impact?

There is room for margin expansion - we have a plan to move it to 25%. Losses from new hospitals over a two-year period could maximum be around Rs. 150 crore. Impact will be minimal because we have large operating cash flows and strong margins from existing operations to absorb the new hospital losses.

On the digital business - what is the full year GMV based on rebasing? And how are new businesses like app monetization and insurance tracking?

Q1 closed at Rs. 682 crore. Full year GMV expected at Rs. 3,000-3,200 crore representing 25-30% growth over previous year. Insurance closed Q1 at Rs. 5 crore vs Rs. 7 crore target due to ongoing technology integrations with partners (Niva Bupa, Care, Star Health). Corporate partnerships including SBI tie-up have started well. App monetization is on track with weight loss drugs, mega pharmacy brands and FMCG brands in the mix.

On AHLL - topline growth but no EBITDA growth in some segments, especially diagnostics looks odd. Specialty has seen margin expansion. Can you give a summary?

Diagnostics had good volume growth. Q1 margins reflect one-off validation costs from opening the Central Reference Laboratory in Chennai (45,000 sq ft fully automated DigiLab) on 30th April. Normalised diagnostic EBITDA margin is about 10.3%. Specialty saw good margin increase. Primary care focus is on revenue growth - margins to come in subsequent quarters. Confident about sustaining growth rates.

On 24/7 pharmacy - pre-24/7 operating margin saw a strong uptick. What drove this? And growth/margin guidance for Apollo HealthCare for next 1-2 years?

Q1 margin was 15.4% vs 12% in Q4, up 340 bps. Drivers: renegotiated rates with service providers across diagnostic and IPOP, better unit economics on pharmacy side, and Q1 insurance revenue at Rs. 5 crore (vs Rs. 1-1.5 crore in Q4) with higher commission upside. App monetization also helped. All revenue segments had better margin profile in Q1 vs Q4.

On the demerger - is the pharmacy business being demerged into a new entity, and how will the merger with Keimed Health be beneficial in terms of synergy?

Yes, Apollo HealthCo will be demerged and listed separately by Q4 of FY27. By that time, the NCLT process of merging Keimed will also have come into play. Combined Q1 revenue is Rs. 4,430 crore including Keimed. Keimed supplies to 60,000+ pharmacy stores apart from Apollo. Current run-rate is Rs. 17,000 crore; by Q4 FY27 we should run-rate at Rs. 25,000 crore with 7% EBITDA margin. Hospital-based pharmacies remain part of hospitals - only retail and online are being spun out.

On Keimed - HealthCo plus Keimed targeting 7% EBITDA by FY27. Keimed is at 3.2% margin in FY25. How much improvement in Keimed margin are you baking in?

About 40 basis points - 3.1% should go up to 3.5%.

Levers for the 40-bps improvement - mostly gross margins or operating leverage?

Majority comes from scale on the margin side. We also have operating cost leverage and certain efficiencies that will contribute.

On GMV redefinition - if the same customer comes for a newer indication, will they not be counted? Will the GMV-to-revenue ratio still be 45-46%?

Correct - last Q1 GMV was 695, restated to 553. Roughly 50% of hospital business GMV is from existing customers (now excluded) and 50% from new customers (the new GMV definition). For existing customers we have a more predictable servicing charge. Revenue story remains intact. We can maintain the 45-46% GMV-to-revenue ratio - no guidance change.

On offline pharmacy - margins stable at 7.7%. With higher private label/non-pharma, any scope to scale up EBITDA margin further?

At HealthCo level it operates on a fixed cost-plus model with the front-end. This quarter is 25 bps higher than last quarter. Last two quarters PL share was stable due to repositioning of products and new product launches. We have a separate head now driving private label as an initiative, expecting margin expansion in coming quarters.

On hospital margins - given Rs. 150 crore of new hospital losses over the next two years, can margins remain stable in FY26 and FY27?

We are at Rs. 700 crore EBITDA per quarter, averaging Rs. 2,800 crore. Rs. 100-150 crore impact is not big on this base. Most new hospitals are in existing markets with clear plans for clinician additions; we expect break-even in 12 months and quick ramp-up to double-digit margins. Overall there will be marginal dip of about 100 bps - we hope to take 24.5% margins higher to 25%+ first, then see a 100 bps dip, with growth visible after that.

On international markets - any Bangladesh patient flow returning? And what other markets are you working on to drive international patient growth?

Bangladesh volume troughed Nov-Dec to early January; it has improved but not back to last year levels. However ARPP is higher as sicker, more complex patients are coming. We are actively engaged in Africa, Middle East, CIS countries, Southeast Asia (Malaysia hospital project, Brunei, Philippines). Iraq is a new market contributing to growth with healthy margins, mostly to Hyderabad and some to Chennai.

What is the current contribution of international patients to hospital revenues?

Currently 5% of revenue. We hope it will be 7% by year-end and target 10% next year.

On offline pharmacy - how many stores currently and what kind of annual addition rate going forward?

Added about 120 stores during the quarter; planning around 600 stores annually. Revenue growth of 17-18% can be expected with the expansion plans in place.

Any specific geographic skew for the new pharmacy expansion?

We are focused on Central region (where we have lesser stores) and South (always our best bet to go into the next level towns).