Apollo eyes 20-23% growth in new co; says restructuring to unlock value

Business Standard

6 hours ago

Apollo Hospitals Enterprise Ltd (AHEL) on Tuesday said its ongoing restructuring aims to unlock the value of its omni-channel pharmacy and digital businesses, while enhancing shareholder returns. The newly formed entity is expected to achieve a year-on-year growth rate of 22–23 per cent, driven by the e-pharmacy segment and other business verticals, with a revenue target of Rs 25,000 crore by FY27.
The digital health platform is also expected to break even within the next financial year. On Monday, the Chennai-based AHEL announced plans to spin off its digital health and pharmacy distribution businesses into a separate entity, with plans to list the new entity within 18 to 21 months. As part of the restructuring, the company's omni-channel pharma and digital health business, Apollo HealthCo, will first be demerged from AHEL into a new entity, following which its pharma distribution arm, Keimed, will be merged into the new company. Its current revenue stands at around Rs 16,300 crore.
The company has stated plans to achieve a revenue run rate of Rs 25,000 crore by FY27 with 7 per cent EBITDA margins, said Suneeta Reddy, Managing Director, Apollo Hospitals Enterprise. After the entire restructuring process—expected to be completed by the listing of the new company by February 2027—the new entity will include the digital health platform Apollo 24/7, the offline pharmacy business of Apollo HealthCo, Keimed, and the telehealth services business.
'We are looking at a growth of around 22 per cent to 23 per cent on a year-on-year basis. In the first two quarters—Q4 and Q1 of this year—we have been able to beat that number reasonably well, and I believe that traction is on. It will primarily come from the e-pharmacy business, wherein we have started touching around Rs 165 crore to Rs 170 crore on a month-on-month basis between the platform and some of the other supporting engines,' said Madhivanan Balakrishnan, Chief Executive Officer of Apollo HealthCo.
'Both the consult business and the diagnostic business, which we work very closely with Apollo Hospitals, are also showing an uptick. There are two more lines of business which we are adding—one is insurance, which is in the early stages; that will also contribute to growth, not just as a standalone line of business but also as a feeder into our primary pharmacy and healthcare lines of business.
'And third, this year we see a reasonable amount of GMV—also more than GMV—revenue coming from our monetisation initiatives. We are reasonably confident of 20 to 25 per cent growth between both AHEL as well as Keimed once it comes through,' Balakrishnan added.