Apollo Hospitals is advancing its platform simplification strategy. HealthCo – comprising its digital and allied businesses – will be carved out from the parent entity and merged with Keimed, with the merged business expected to list separately by Q4 FY27.
Management is targeting revenues of around ₹25,000 crore with approximately 7% EBITDA margin at the time of listing, driven by economies of scale, operating leverage, and tighter cost controls.
The integration with Keimed is aimed at strengthening the supply chain footprint. Keimed already services over 6,000 pharmacies, including Apollo’s own network. The company anticipates Keimed’s margins to improve from about 3.1% to 3.5% as volumes grow.
In its online pharmacy operations, Apollo is focusing on sustainable unit economics rather than aggressive customer acquisition. Discounting is being moderated below industry averages, supported by cost efficiencies from reduced acquisition spend and lower discounts in its 24/7 business.
The digital division is aiming for GMV of ₹3,000–₹3,200 crore in FY26, with break-even targeted by the end of that year and 20–25% growth thereafter. Insurance tie-ups with Niva Bupa, Care, and Star Health are active, while the SBI partnership is bringing in higher-quality repeat customers.
The offline pharmacy segment plans to open about 600 new stores in FY26, projecting 17–18% revenue growth. Margin expansion is expected through private-label offerings, with a newly appointed executive leading the initiative. While e-commerce competition in prescription delivery is intensifying, Apollo sees this as expanding the market rather than purely eroding share, citing its brand trust, compliance standards, and logistics capabilities as key strengths.
For investors, the demerger and listing roadmap offers clearer visibility into value creation for a segment whose profitability was previously obscured. Key milestones to track include HealthCo’s break-even by FY26-end, Keimed’s margin gains, and sustained discipline in customer acquisition costs and discounting despite rising competition.
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