Bangladesh and quick-commerce overhangs disappeared by Q3FY26.

On 24/7 - some competitors have tied up with quick commerce platforms for 10-15 minute medicine delivery. How do you see competition for the E-pharmacy business? And on a stand-alone basis, when do you see cash breakeven for 24/7 in light of the higher ESOP charges in Q4?

We have no plans to tie up with quick commerce - we already have an alliance with Amazon and a year back we launched our own 19-minute proposition which now contributes ~30% of GMV in our top 6 cities. We will not relegate ourselves to a back-office function for these players. On breakeven, we stick to the path of cash breakeven between Q3 and Q4 FY26 - Q3-Q4 FY25 was a bit flat due to one-time expenses but unit economics is steadily improving. Sanjiv added that the accelerated ESOP cost in Q4 FY25 was a one-off; FY26 ESOP cost will be ~INR 100 crore (in line with prior year) and will drop to roughly one-third in FY27.

Aren't you worried that competitors might take a larger volume chunk because of 10-minute delivery?

The quick commerce trend essentially impacts only the OTC/FMCG side, where regulatory requirements give Apollo Pharmacy and 24/7 an advantage. We saw a small dip but are back on course. Bangalore numbers (where these players are experimenting) are holding up - we continue to grow there. We are watching the space carefully but the equations do not justify a tie-up at this point.

On the Healthcare business margins close to 24% - how should we look at the trajectory given new units coming up in '26 and beyond? Can you maintain ~24% margins despite new beds?

Existing units will continue to generate strong cash flows and stronger EBITDA margins. We see ~140 bps as the expected margin offset - 80 bps from cost reduction initiatives and 60 bps from improved revenues via payer mix, complexity and ARPOB. These will minimize the impact of new hospitals. So yes, this year we expect to maintain margins around 24%.

On the Digital business - update on new businesses (insurance launched in March)? And pre-OpEx margins seem to have moderated - when do we start seeing them improve to achieve cash breakeven in H2?

Insurance business officially started 1st April as a full-fledged corporate agent; numbers have already doubled vs last quarter. We are running at INR 6-7 crore topline this quarter and targeting an annualized INR 75 crore, exiting at INR 8-10 crore monthly. Currently 4 of 12 signed insurance partners are operational (Niva Bupa, ICICI Lombard, Star Health, HDFC Ergo); 4 more come in this quarter. SBI Cards launch this month is also driving good interest. On margins, Q4 unit economics improved (from ~INR -60 to INR -27 on digital), discount structures stabilized at 13-14% and cost of delivery is coming down - upward trajectory will be visible in Q1.

On hospital margins - is it fair to assume capacity additions come through only later in the year, given losses will be visible in Q4? So no hospitals start in H1?

Even in H1, some expansions like Secunderabad Wellness (existing hospital) will not see significant losses. Pune, a new hospital, is where we could see some small losses. Q2 - definitely no significant losses; we would have added another 150-200 beds. By Q4 yes, there will be significant bed addition. Both Jubilee Hills and Secunderabad come through in this year itself.

Just a clarification - most of the new operating beds are expected to come from Q4 FY26 and that's where the 140 bps impact is. Is my understanding correct?

Correct. By Q3 you will see us operationalizing Pune, Kolkata, the Defense Colony and the first Sarjapur acquisition - all four should get operationalized by Q3 as our internal target.

On hospital growth - can you guide for FY26? Also Q4 hospital growth slowed to 10% - is the 2% Bangladesh impact the main reason?

Bangladesh impact was pronounced in Q3 and very pronounced in Q4 - for the full year Bangladesh impacted revenues by INR 100 crore (1.5% of full year). Had Bangladesh been with us, EBITDA could have been ~50 bps higher. Going forward, we look at low- to mid-teen organic growth on Healthcare Services. New beds will start contributing significantly from FY27, where we hope to add over INR 1,000-plus crore of revenues from new hospitals.

There is no mitigation for Bangladesh - we should assume it's not coming back in FY26?

We have mitigated it with higher CONGO-T contributions. Madhu added that we have focused on quality of revenue with higher CONGO specialty contribution and have pivoted to other international markets which have grown substantially YoY. Suneeta added that local market share is improving and surrounding markets are flowing patients into our metro quaternary care hospitals - this trend will continue into next year.

On the 80 bps cost and 60 bps revenue improvement - what specifically are we cutting on costs and what are the ARPOB improvements?

We invested substantially in technology and are now seeing improvements in workforce productivity. We are being very careful with material costs and improving sustainability as we take out high complexity cases. While case complexity has increased we have still expanded margins. The focus is on both material cost and workforce productivity.

On Keimed - we saw 22-23% revenue growth this year but margins dipped YoY. What is driving growth and what caused the margin slip?

Keimed margin dipped slightly due to one-time expenses related to acquiring various subsidiaries and higher legal fees, plus a mix change during the year. Going into FY26, both the absence of these one-time costs and a focus on different product categories will give better EBITDA margins - we are going back to the better EBITDA profile.

On Bangladesh - is the worst over and on the FY25 base will impact be limited next year?

You will see one more quarter of impact in Q1 FY26 because Q1 last year had no impact. After that the Bangladesh effect should go away.

The ESOPs given - are they shares of the listed entity or HealthCo (which is now merged with Keimed)?

HealthCo.

Timeline for completing the Keimed merger?

15 months.

On Apollo HealthCo plus Keimed FY27 guidance - margins of 7-8% (assumed exit rate). From current 3.2%, that's a significant expansion - what are the drivers?

Current 3.2% includes ESOP cost and 24/7 operating losses. ESOP cost will taper to one-third in FY27, and digital P&L will breakeven. Stripping these from today's number would already give 6.4%. Plus offline pharma can expand margins by ~100 bps from 7.4%, and Keimed has 40-50 bps upside from one-off expense normalization. Together these push 3.2% blended to 7%+. Confirmed: breakeven in online pharmacy distribution and 24/7 by end FY26 is excluding ESOP costs.

On 24/7 GMV - around INR 800 crore for the quarter - within online pharmacy how much is prescription versus OTC/FMCG (which is more vulnerable to quick commerce)?

Ratio is roughly 80-20. Rx medicines and OTC contribute around 75-80%; health essentials and FMCG (moms, babies) contribute another 20%. We saw a blip in Q2-Q3 but we are back to normal numbers; new categories like nutritional supplements are opening up. We should be able to hold our numbers despite quick commerce.

On 24/7 - you talked about 17-18% EBITDA margins. How do operating expenses (~INR 480 crore this year) play out - do they come off in absolute terms?

There is room for 15-20% reduction. FY26 expenses should be around INR 400-425 crore, less than INR 480 crore this year. Beyond a certain point expenses won't fall further; insurance will help margin profile. With expenses around INR 425 crore we should be able to hit breakeven in Q3-Q4.

And operating expenses - is it a number that stays more or less with inflation increases going forward?

Yes.

On GMV-to-revenue conversion ratio - what should we expect with the new services?

Currently roughly 37%. We should be able to hit closer to 45% to 47%. That is the GMV-to-revenue conversion target. Margins inching closer to 20% in FY27 with operating expenses staying around INR 420-430 crore - this is how the 24/7 P&L should shape up.

On the Diagnostic business - YoY slowdown vs sharp improvement in Specialty Clinics. Can you explain both? And what is the strategic plan for AHLL?

In diagnostics we had to reset our franchisee model with changes to pricing and commission structure - hence the slowdown - but the new model is more sustainable and profitable. Over the last 2 years we improved diagnostics EBITDA by 4.5%. Starting this quarter you will see high-teens growth in diagnostics. On Clinics, we are doubling down via ProHealth and specialty checks, working closely with hospitals - good ProHealth volume growth continues. On AHLL strategy we are doubling down on diagnostics and primary care clinics. Suneeta added that this is probably the only primary care clinic model in India with GPs and specialists, expecting significant funnel into AHEL.

On Diagnostics margins - peers are in mid-20s EBITDA. Where do we end up over the next 3 years?

We are targeting 20% EBITDA margin, about a couple of years away. This year diagnostic margins will grow 2-3%. Compared to peers who have full volume, our focus this year is volume growth via lab expansion - operating breakeven for every new lab is 18-24 months. Target of 20% is in mind.

Timeline for the Gurgaon project? And progress on the Worli project announced earlier?

Gurgaon project should be commissioned more towards end of Q4, around March; Hyderabad hospital is on a similar time frame. For Worli we are getting all approvals and hope to start digging ground after the rains.

On Indraprastha Medical - you mentioned capex earlier - is it complete or in progress?

It's in progress and will be made by Indraprastha Medical. Parking, neuro center and room expansion - we have not yet started but have all the drawings and are in the approvals process. We have got approvals for capital expense and FSI; submitting drawings now. Timeline ~2 years from May '25.

On the market structure of pharma industry - both retail and distribution are fragmented. Long-term consolidation outlook for India?

Online today contributes ~15% of our Pharmacy business; the wider industry remains fragmented with only 2-3 major players (Tata 1mg, PharmEasy) all in consolidation mode. We target taking online to ~30% of our overall Pharmacy. On physical Apollo Pharmacy has 6,600+ outlets; we open ~1 store a day with 375-500 more in the plan. We evaluate offers but see no major synergies. Rx is growing 23-24%; the slowdown was on FMCG and health essentials. Keimed scope adds supply chain synergies. Suneeta added FMCG slowdown is industry-wide and reflected in AHLL too.

Total addressable market for offline channel - against ~9 lakh pharmacies in India, how many stores can you have over 5-10 years?

We add about 600 stores every year and will continue. Today our share against ~9 lakh retailers is small - we are at about 8% of the organized market and aim for 20% in the next 5-6 years through network addition and entering new geographies. Distribution business will remain separate from retail because distribution is geographically organized in India.

On Apollo Cradle (Mother and Child segment) - current revenue mix between gynecology, pediatrics or other? Growth rate? And expansion pipeline - greenfield or brownfield?

Current mix is primarily OBG and women's gynecological surgeries; pediatrics mix is quite low. We just inaugurated our flagship Cradle Royale in Electronic City Bangalore with PICU setup. Pediatric mix expected to grow ~10% in the coming year. We have 12 Cradles pan-India - present in Bangalore, Delhi, Hyderabad, Chennai. Focus is on driving higher utilization in these cities for OBG and gynecology and other hysterectomies.

On doctor payout structure within Cradle - industry has 30-50%. How does Apollo Cradle structure work?

We have a mix of full-time doctors and consultants. Our payout structures are around 20-30% at a weighted level average. These differ by city and by model (full-time, visiting consultant, FFS). We just received the Times ranking award for being the best Cradle for the third year in a row - Cradle continues to be the most loved brand in Mother and Child segment.

On Secunderabad brownfield expansion - 80-bed addition shown at INR 545 crore project cost is INR 7 crore per bed - way higher than expected?

It's INR 54 crore - there is an error in the slide deck (Slide 24/54). We will correct this.

On 24/7 - the 17-18% margin you mentioned, is that for FY26 itself or by FY27 (this year was 13.1%)?

This increase should happen in this year (FY26).

Sales-to-GMV at 45% - that's also this year itself? It's a pretty accelerated profitability jump - is it being driven by insurance scaling up or other initiatives?

Yes, also this year. Drivers: (1) insurance which is high margin; (2) app monetization with pharma companies showcasing FMCG and OTC brands via digital inventory; (3) discount reduction via partnerships with banks on payment-mode side. Plus pharmacy, diagnostic and consultation margins evolving better in FY26 vs FY25 on scale. Madhivanan added insurance topline GMV is not significant yet - by Q4 we should be in good position; digital asset monetization (along quick commerce/Amazon lines) and bank partnerships will help margin.

On Northern region - this is a region where Bangladesh impact should be minimal but Q4 growth is 9% and full year ~11.6%. What explains the subdued growth?

North Q4 is traditionally subdued because of winter months. Krishnan added that Lucknow and similar regions see Q4 as a cyclical low; there was also the Kumbh effect this time. Otherwise we are back on track in Q1.