Bangladesh and quick-commerce overhangs disappeared by Q3FY26.

Last time we discussed about INR150 crore cost headwind coming out of the new hospital ramp-up. Any updated thoughts on that? How much of it is already built into these numbers and how much should we expect in the coming quarters?

We will come back to you by Q4 again, but we continue to believe INR150 crore is a good number for now. Currently in the embedded numbers, we have approximately INR15 crore of losses in reported numbers for Pune and Athena. By Q1 next year we expect to operationalize Hyderabad, Calcutta, and Bangalore (Belenus); Gurugram is delayed by 2-3 months due to environmental issues and will be more like Q2.

On the GMV of the Digital business - we have seen a sequential drop in GMV. And revenue to GMV ratio also went up. Could you share your thoughts on that?

Two things happened. First, on 31st of September there was a large reduction in GST on pharmacy and other products, which resulted in a GMV impact of roughly INR30 crore to INR35 crore a quarter. Second, we stopped supplying to Amazon channel in early Q2 of this fiscal year. The cumulative impact of these two adjustments was roughly INR75 crore for Q3, made to enable apple-to-apple comparison.

There has been a moderation in revenue growth quarter-on-quarter for the Digital business. What should be the revenue base going forward, what drove this moderation, and from a guidance perspective do we still keep our guidance for cash EBITDA breakeven by end of fourth quarter?

The cash EBITDA breakeven is pushed out by one quarter to Q1 of FY '27 because of an insurance revenue recognition mismatch (post-September GST change in health insurance) which has set us back by around INR17-odd crore (later corrected by Sanjiv to INR7 crore for Q3). Pharmacy online business has actually grown 32%, average order value is up by about INR111 net of GST, cost of delivery is coming down, and at CM1 level we are positive and improving. The IP/OP revenue recognition pause will be reactivated next quarter.

On the bed expansion - how many beds will be operationalized in Q1, and how will the ramp-up look at the hospital level over the next 6 to 9 months?

Calcutta has 225 beds with half operationalized in Q1; Hyderabad 300 beds with at least 50% in Q1; Pune at 75% now with another 100 beds added in Q1; Gurugram 200-250 beds in Q2; Sarjapur 150 beds with 100 hoping to operationalize. Roughly 40% to 50% of the four new hospitals will be operationalized by Q1, with Jubilee Hills expansion and Secunderabad coming during the year.

On ARPOB growth - mid-teen levels - what is driving this? In the opening remarks 5% price growth was mentioned, but in the PPT 3% is mentioned. What is the difference?

3% was the tariff increase taken during the year, whereas 5% is the effective price realization including some insurance contracts that got reset during the year. We do not give ARPOB but the increase in ARPP is a combination of higher complexity cases, CONGO-T growth, surgical growth, with pricing realization at 5% and balance from case mix.

The price increase and realization increase you are talking about - did that kick in Q3, or was it already there in Q2 and Q1?

It was there in Q2 also. Suneeta Reddy added that mostly it kicked in Q3. We saw 4.5% in-patient volume growth in Q3 versus 2% in Q2 and competitors are in different geographies; we are pan-India, plus higher complexity CONGO-T cases. Should sustain going forward.

In AHLL, the additions in centers - are these mostly on the diagnostic side or all across?

Most of these additions are on the diagnostics side. We also launched two new clinics, one in Chennai and one in Hyderabad. We have expanded into new lab geographies and most are infrastructure created in existing geographies, opening collection centers and company-owned outlets.

Update on the HealthCo side regarding the corporate action about demerger and progress on Keimed side accumulation of different pieces of business?

We have obtained Competition Commission approval and SEBI approval. We have filed with NCLT and NCLT has listed and started the hearing. Keimed is progressing on time and has streamlined the entire subsidiary network - they are 100% subsidiaries of Keimed which is going to merge into AHLL.

On hospital business, how is your negotiation with health insurance companies going? Some peers had issues. How is contracting and onboarding progressing for existing as well as new hospitals?

We have a good relationship with all insurance companies and a central relationship with them. There has been some delays in getting certain insurance approvals in some markets, which is why even last quarter we saw some contracts getting pushed out for renewal. We are on course and seeing that we are fine going forward. Contracts are still 2 years though we would prefer annual.

Again on 24/7 - other metrics like doctor consultations, doctors on platform, diagnostic samples all changed compared to September numbers. Can you explain all changes when booking GMV and clarify the INR75 crore adjustment in 2Q numbers?

On overall GMV side, two factors changed - GST and one of the channels we closed (Amazon). On diagnostics and consultation side, there is no change - business remains the same and commission rates between entities are unchanged. IP/OP is now a flat fee on quarterly basis, more like a booking or ensuring tech platform for the entire Apollo ecosystem. The two adjustments were made to ensure apple-to-apple comparison.

In terms of annual GMV target, this quarter was around INR425 crore - will this be the run rate or much better numbers ahead?

You can expect a consistent growth of around 30% of the GMV for this financial year. Once we are done with the numbers, we will come back for the next year plan.

On base hospitals (excluding new), at metros 70% occupancy, non-metro 62%, ROCE 31% - what is further scope for these hospitals to drive EBITDA going forward through CONGO, patient mix or payer mix?

Several levers - opportunity on length of stay reduction through operational excellence and digital technology investments; minimizing day-to-day, week-wise and seasonal volatility; consistent focus on case mix and intentional shift to high-complexity cases especially in flagship hospitals. Transplant revenue at group level was up about 50% this quarter compared to last quarter.

On combined Keimed + offline + online quarterly run rate of INR50 billion, target to reach INR250 million annualized by Q4 FY '27 (effectively INR60-62 billion). What other factors will drive this number?

All business lines including frontend, Keimed, online pharmacy (growing 30%) are seeing decent growth. We are at roughly INR20,000 crore Q3 annualized, with five quarters to hit INR25,000 crore (~25% from now to there). At about 20-22% annual growth trajectory, we should meet this number easily. We do not see any challenge in hitting the top line number.

Even with new operational beds, consol employee cost is down sequentially - any specific reason there?

In Q2 there were two one-offs. There was a sick leave encashment provision required under accounting standard - INR12 crore - and an additional cost of PLVP (performance-linked variable pay) because July is when we do increment. These were in Q2 and not in Q3, otherwise it is aligned.

On physical pharmacy growth - same store growth plus store addition - what level do you expect in physical pharmacy growth in near to medium term, and what drives same store growth of 16-18%?

Currently at about 20-20.5% on total network. Same-store growth expected at about 18% (clarified to 16% same-store vs 20.5% overall) and store additions will continue in the range of 600 per annum. Drivers include private label, refresh stores, changing model, dynamic inventory changes - all add to that growth.

On margin trajectory next year given INR150 crore loss guidance for new units - do you have levers in existing network to mitigate the impact, or significant dip in cumulative hospital business margins next year?

Lever is asset utilization - even with bringing down ALOS we have headroom for lifting volume and asset utilization by another 8%. We have not done any significant cost cutting which we hope will bring another 80-100 basis points. With this we hope to minimize losses from new hospitals. A. Krishnan added that at least 100 basis points margin expansion is possible in the existing business next year.

On margins - reported 24.8% with INR15 crore cost from new units already in. Base network margin seems to be 25.3% in Q3, with scope to go up by 100 bps. Can base network be above 26% next year, with INR150 crore drag from new units coming on this 26%?

Yes, that is correct on both points - base network can be above 26% next year and the impact of INR150 crore losses from new units should come on this 26% base.

On Keimed - good margin expansion this quarter on QoQ and YoY basis. Can you articulate key reasons for that?

What you saw was the aberration in Q1 and Q2 where overall EBITDA percentage was low because of restructuring and necessary legal cost. Those are now removed. We discussed in last earnings call that in Q3 we would come back to operation of 3.1 upwards and 3.3% is what we have in Q3 - it is more an aberration that got cleared in Q3 plus business efficiencies.

Because of the GST change in September, did you see any revenue push-out from 2Q to 3Q (retailers reducing inventory in 2Q and rebuilding in 3Q)?

No, we did not see any such impact. Obul Reddy added that there was very good improvement in FMCG and pharma with sales at the same level, and FMCG consumption is very good with good growth on that.

On potential losses from new units - first month from two hospitals is around INR15 crore and full year guidance is INR150 crore. Annualized losses would be more like INR180 crore. Is INR150 crore conservative given Gurugram greenfield will take more time vs brownfield?

We have two quarters of Pune to ramp up before some of the other hospitals come on stream, so that should benefit us next year. The INR15 crore is for 3 months of Pune costs of Athena - the revenue has been more in last 1, 1.5 months but cost has been for 3 months. Broadly we would like to keep it at INR150 crore for now and we will see during the next year.

On GMV growth of 30% - is that for Q4 alone or full year FY '26? And for 9 months number looks much lower - are you adjusting base for GST and Amazon impact?

This is on full year FY basis - 30% to 35% growth on GMV basis. Amazon was roughly INR160 crore for full year last year. We are talking about platform GMV excluding IP/OP (which converted from variable pay model to fixed fees this year). Going forward our guidance excludes IP/OP. Full year this year should be in range of about 28% growth versus previous year adjusted.

Broad overview for hospital - 1,500 beds in next year with 50% operationalized. What is the time period for getting to 60-70% occupancy? And what occupancy rate in first year for the 750 beds opened?

We will open 750 beds next year in coming year, and another 750 beds after that. In 2 years we should be breakeven on the 1,300 beds we are talking about. First year occupancy on 750 beds will be around 40%.