Apollo hospitals net profit rises 32 percent in Q2

Apollo Hospitals Enterprise Limited APOLLOHOSP reported a consolidated net profit of Rs 630 crore for the second quarter, marking a 32 percent year-on-year increase. Consolidated revenue grew 23 percent to Rs 7,615 crore, supported by broad-based expansions across hospitals, diagnostics, and digital healthcare. The hospital business drove revenue up by 23 percent to Rs 3,567 crore, helped by 14 percent volume growth and an occupancy rate of 73 percent. However, segment EBITDA margin dipped 60 basis points to 24 percent due to pre-operative expenses from new, loss-making facilities. Meanwhile, Apollo Health and Lifestyle Limited posted a net profit of Rs 18 crore, reversing a net loss from the previous year, with diagnostics emerging as a primary growth driver. Apollo HealthCo expanded revenue by 23 percent, and the digital arm, Apollo 24/7, turned cash positive for the first time. While operational metrics remain robust, the near-term outlook faces friction. The upcoming demerger of the omni-channel pharmacy and digital health business, scheduled for Q4FY27, alongside recent divestments, creates valuation uncertainty. Investors are currently weighing standalone asset values against the broader corporate structure, causing a near-term stock overhang despite strong underlying performance. The stock currently trades at 26x FY27e EV/EBITDA. Investors should monitor execution on the targeted 13,800 bed capacity by FY31 alongside the progress of the pharmacy demerger.