Bangladesh and quick-commerce overhangs disappeared by Q3FY26.

How to think about organic growth for hospitals given (a) Bangladesh impact incrementally going away (1% positive) and (b) news of insurance pricing being kept steady for next year - guide on organic hospital growth for next year?

Suneeta Reddy: We are quite confident we will get back into 30% (sic - target) since Bangladesh has at least 60% started coming back in October and we are exploring new markets including Uzbekistan, Africa, Indonesia, Iraq. A. Krishnan: Insurance contracts are once in two years - so by definition we don't get a price increase every year; certain contracts come up for renewal this year and certain others next year - it continues the same way. Madhu Sasidhar: There has been improvement in quality of revenues with increase in case complexity and substantial improvement in CONGO specialties; we have invested heavily in recruitment in mature units which will add to organic growth.

On Slide 16 capacity expansion - earlier we used to say FY26 commissioning, now putting it under FY26-27. Any change in ramp-up plans for the next 2 years?

Six new hospitals to come over this year and next year. Pune and Defense Colony soft commissioned, will start reporting numbers from Q3. Sarjapur Bangalore and Calcutta in Q4. Hyderabad end of Q4 or early Q1 (cost up by INR 35 crore as comprehensive oncology with radiation therapy added). Gurugram around Q1 (enhanced facilities with more private rooms). Brownfield expansions Jubilee Hills, Secunderabad, Malleswaram and Mysore work has started. By end of next year all census beds should be fully operational, starting at 50% and ramping up.

Between now and end of FY27, six hospitals coming up - majority in '27. Comment on impact on EBITDA margin trajectory due to new costs coming up?

Pune and Defense Colony in Q3, Sarjapur and Calcutta in Q4 - so four hospitals come in FY26 itself. Hyderabad and Gurugram come into next year. We continue to believe overall EBITDA losses from these hospitals next year should be around INR 150 crore, but will come back closer to Q3/Q4 once we commission some of these hospitals - we do not expect higher than that.

Do these EBITDA losses include fully built-up costs (doctor cost, facility costs) once a unit is commissioned?

Yes, that is correct.

On spend on Apollo 24/7 - last two quarters around INR 94-96 crore spend. What kind of headroom to reduce from these levels or are these sustainable cost levels?

A big chunk of the cost reduction has happened as an individual entity - so this would be a new normal. As we get into the program of aligning between Keimed, Apollo Pharmacy, PD, we will see a few more synergies. Biggest expenses are primarily marketing - has come to a very rational level. There is nothing much more to bring down on the expense line for Q3/Q4 - focusing on the revenue side.

Does the target of achieving cost breakeven for 24/7 by end of this fiscal remain?

We are on course. There might be one hiccup as we are investing strongly on the insurance side of the business and seeing good traction. There might be a little hiccup here or there, but we are on course as we speak.

On Apollo 24/7 GMV - around 7,200-7,300 stable for last 3-4 quarters. Cost measures will help profitability - how do we think about improving GMV?

Look at GMV from three perspectives: (1) Pharmacy growing - platform revenue from app/website growing around 30% YoY and 5-7% QoQ; (2) In this quarter we exited a few B2B businesses for bottom-line reasons - that is why GMV reduction; (3) GST - earlier reported on total GST basis but with industry advantage it shaved off around 6% from the top line, no impact on bottom line. You will start seeing increase on a quarter-on-quarter basis as new normal.

GST is more of a transitionary period - any other business aspect to drive GMV?

We will continue to grow at our original guidance of 25-30% on overall. Diagnostic business is picking up - we buck seasonality. On hospital side, business driven through consults - we are relooking at our approach to be much more relevant. Insurance will take a little time but we have started clocking good numbers in NCR and Hyderabad - new businesses will pick up from Q4 onwards.

On hospital side, Karnataka cluster - IP volume decline. Could you share more?

A. Krishnan: Karnataka region had a significant drop in medical admission. Of the 6% overall drop in this region, medical volume drop of 15% while surgical volume went up by 2% and cath also went up by 13%. Seasonal medical admissions in Q2 last year were not there this year. ARPP in this region went up by 14% as surgical and cath have higher ARPP than medical admissions - core continues to remain intact. Madhu Sasidhar: Last year was almost entirely a very bad dengue season, which we have not seen this year - year-to-year seasonality. High complexity volume continues to be strong and growth will continue into this quarter.

On Keimed margins - softness of around 30 to 40 basis points decline Y-o-Y. Past commentary on restructuring/buyout of minority stakes - is that activity over? How should we think about Keimed margins, especially in context of overall margin guidance of 7% by 4Q next year?

Yes, slight drop in EBITDA margins for Keimed in Q2 - this is only one-time integration and scheme-related expenses accounted in Q2; will not happen from next quarter onwards. Over a period of time, looking at 20-30 basis points over and above 3.1% Keimed EBITDA. On 7% Q4 FY27 guidance with INR 25,000 crore revenue run rate - we are hopeful we should hit that mark. H1 FY26 at INR 9,200 crore turnover (~INR 18,000 crore plus annualised) and EBITDA is 4.4%; excluding digital losses already at 6.2%. After Q4 breakeven you would start seeing overall EBITDA in 6%+ range and one year forward in 7% range.

On Specialty Care segment within AHLL - growth has been soft and you called out competitive headwinds. Which verticals within Specialty Care are seeing higher competition and what is the outlook?

In terms of competition, the only one with serious competition is Diagnostics because in Spectra there is no competition. In Cradle, only where our Cradles are present there is little competition, except in Karnataka where Cloudnine has a big market share. Our focus will be on primary care - growing diagnostics and clinics with GPs at the center to act as a funnel to Apollo Hospitals. Dialysis continues to do well.

You mentioned 13% growth for Healthcare Services - is this organic, with expansion adding to it?

Over a three-year period there is headroom for growth within the system - this should result in 13% growth in existing beds and an additional 5% coming from new beds in the next 36 months. Next two years you will see another 5% coming.

On utilization falling from 73% to 69% - is there a theoretical lower limit on ALOS? When will we see better volume growth - utilizations have been below 70%? Plan to go above 70%? Comparing to peers with higher utilizations.

Suneeta Reddy: 70% is definitely a benchmark. ALOS dropped 7% via new technologies (cardiac minimally resistant, robotics) allowing faster discharge. Targeting 70% occupancy through improved payer mix - focus on corporate, retail and international coming back. Metro hospitals have crossed 70% - October showing higher metro occupancy; separate plan for non-metros. Madhu Sasidhar: ALOS benefits from digital transformation, electronic command centers reducing variability - probably won't see sustained ALOS reductions other than catching-up units. This positions us to drive utilization higher with less variation - targeting much higher levels including 80%+ in some hospitals especially with elective and semi-elective.

On the EBITDA loss guidance of INR 150 crore for the six hospitals - does this hit full fiscal '27, is it spread? Past 2015-2018 bed additions led to volatile margin trajectory - what is being done differently for smoother metrics?

A. Krishnan: All in existing markets - Delhi, Hyderabad, Calcutta - we have a clear ramp-up plan. Internal target is to get all of them breakeven in 12 months. Two hospitals in Q3, two in Q4, then Q1 - spaced out a bit. First half of next year could be a bit higher then come off. Will start showing it separately in earnings presentation. Suneeta Reddy: Believe it would not be a significant impact on EBITDA margin because we have strong cash flows. A. Krishnan: Existing hospitals also have room for growth via volume and ARPP-driven growth.

On insurance business - how are you selling policies now, mostly online?

Combination of three. First attempt is digital - no intentions of spending on marketing for new customers - focusing on INR 1 crore plus and 44 million registered customers. Insurance is complicated - small ticket sells well on digital but for INR 20,000-30,000 ticket sizes people seek assistance. Building call center capability - currently 300-seater, intend up to 500. Combination omni-model: digital leads plus call center; not putting manpower on the field.

Do you plan to promote insurance through your physical pharmacy stores?

We will come out with specific products like vector insurance or personal accident under the POSP model, but expected only around next financial year. Want to get basics right first. Out of 7,000 outlets we might identify 1,000 right ones to sell products that fit normal journeys, without putting a person there - not intending to increase cost.

In HealthCo when you say diagnostic business, it is sourcing of diagnostics - back end is AHLL?

Correct. We are primarily into originating business for them - the final labs etc are with AHLL. Think of us as a digital arm for AHLL.

Hospital business EBITDA margin remained same despite strong ARPP growth of around 9% and acuity mix is positive. What is driving profitability to remain same and how comfortable are we offsetting losses from new units in next four quarters?

Suneeta Reddy: ARPP 9% growth indicates real complexity move-up. To prepare for new hospital expansion and grow, considerable amounts above INR 67 crore was spent on doctor hiring. Improved sales and marketing and project teams started recruiting for new hospitals - costs ahead of opening, hence 24.6%. Going forward, benefits will show. Impact of new hospital losses to remain at INR 140-150 crore. A. Krishnan: Last year same quarter saw a margin spike from medical admissions, but full year margins were 24.2%. H1 of this year is 24.6% - on annualized basis margins should be higher than last year. Suneeta Reddy: Plan to cut costs by INR 120 crore - achieved INR 60 crore so far - will support EBITDA margins in 24.6-25% range.

INR 120 crore cost cutting - is it related to hospital business and which areas?

Broad-based approach - opportunities in materials management and supplies, more efficient HR utilization given digital technology investments driving efficiency. As new hospitals come online, redeployment is leading to better HR efficiencies. Some opportunities to reduce ongoing costs in IT and other areas as well.

On Keimed because of GST change in this quarter - how much sales did the business do, only Keimed - how much sales loss was there?

About 4% revenue drop expected because items in 12% slab moved to 5% - the entire 12% GST slab is removed and 70% of those moved to 5%. Expecting about 4-4.5% revenue drop.

Is the inventory back to normal at the customer end at the pharmacy end?

From day one we have been managing - planned it well, transition was smooth including 700 frontend stores - implemented software, new billing was done at 7:00 AM on 22nd and everything passed on to customer per regulation. The inventory at retailer level is back to normal.

Keimed margin compression of about 40 basis points sequentially and Y-o-Y - reason?

This is only one-time - related to scheme and integration related expenses. Will not happen in next coming quarters. Even if those expenses are there, they will be very low - not material to pull down EBITDA percentile. Q2 saw the impact because of these expenses.

Healthcare Services grew 11% with ARPP up 11%, occupancy at 69%. Was Q2's ARPP growth led by tariff revisions, richer case mix or structural shift in patient segments?

Most tariff increases already realized previously. Almost all improvement in ARPP came from improvement in case mix - evident across higher complexity specialties including cardio, neurology, gastroenterology and orthopaedics. Broad-based ARPP increase primarily in large metro hospitals but across pretty much every single geography.

On AI intervention in oncology, radiology and stroke care - beyond patient outcomes, are you seeing measurable operational efficiencies and how scalable across hospitals?

Using AI very broadly - AI agent on website connects patients with complex conditions to right doctor and books appointments - that website business grew 318% YoY due to scalable AI consumer-facing technology. Internally, command centers with real-time intelligence on patient flows; layering agentic technologies to autonomously anticipate and proactively solve patient issues. Tremendous potential for better efficiencies through AI.

Q2 increase in costs related to hiring for hospitals next quarter - is this for the two opening in Q3 with another jump in next quarter for the two in Q4?

Some of it is correct. In Pune there is richer cost in doctor hiring with full-blown launch about to happen - have to hire doctors ahead of opening; same will happen in Gurgaon. This quarter has captured some costs. Little additional cost will come in March.

For hospitals expected to open in Q4 - hiring will happen ahead?

Some hiring yes - but not a huge figure for this year or this quarter. It is not huge but it is there.

We are at 24.5-24.6% EBITDA margin in hospital business but we already added some opex for newer beds - what are base network margins adjusted for these costs and how do they progress over next couple of years excluding new beds?

Approximate cost in this quarter is roughly INR 10 crore, next quarter onwards will increase. We will show the split from next quarter of established hospitals and new hospitals - both revenue and EBITDA. Currently INR 10 crore built in plus almost INR 5 crore on doctor side - separated out from next quarter. Hoping and working to get overall margins over 25% next year and even higher on established hospitals - currently at 24.6%.

INR 15 crore cost built in Q2 is roughly 50 basis points - so base network is above 25% in Q2 - can we expand those margins over next 1-2 years?

Yes clearly there is room because there is headroom for growth. Working on the clinical program - internal target is to take it higher by 500 basis points.

On CGHS rate revision - have you done an exercise to suggest the average rate hike received for key therapies like onco, cardio etc?

Certain specialties have prices increased reasonably - cardiac, onco, ortho will be reasonably better now. But under empanelment rule book, we have to take whichever patient they send - cannot deny admissions. Not appropriate to cherry-pick specialties unless Government allows. When you compare overall average realization to insurance or cash tariff, it is still a good 65% discount to overall realization - we don't make those margins.