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May 31, 2024

Apollo Hospitals on Expansion Spree: Targeting Mumbai and Bengaluru Markets

Apollo Hospitals Enterprise Limited (AHEL) is gearing up for significant expansion in the key markets of Mumbai and Bengaluru. This strategic move follows a recent investment deal between private equity firm Advent International (Advent) and Apollo HealthCo, a wholly-owned subsidiary of AHEL. The deal, valued at Rs 2,475 crore, aims to bolster Apollo HealthCo’s operations, with AHEL leveraging Rs 890 crore from the transaction to drive both organic and inorganic growth.

As part of its expansion blueprint, Apollo Hospitals is set to establish two 500-bed hospitals in Mumbai with an estimated investment of Rs 2,000 crore, and a 400-500 bed hospital in Bengaluru. These developments are integral to AHEL’s long-term strategy, which envisions an investment of approximately Rs 3,000 crore over the next three years to add 2,400 new beds across urban locations. “In all urban locations, we are looking at 400 to 500-bed facilities. The investment in Mumbai will be around Rs 2 crore per bed, and we will be coming up with two 500-bed hospitals in Mumbai,” stated Krishnan Akhileswaran, Chief Financial Officer of AHEL.

This expansion is poised to significantly enhance Apollo’s presence in these metropolitan areas, aiming to meet the growing demand for advanced healthcare services. The financial momentum behind this growth is underscored by AHEL’s impressive performance in the fourth quarter of the financial year 2023-24, where it posted a 77 percent rise in consolidated net profit to Rs 258 crore, up from Rs 146 crore in the same quarter the previous year. The company also reported a 15 percent increase in revenue and a remarkable 31 percent growth in EBITDA, driven by the profitability of HealthCo and Apollo Health and Lifestyle Limited (AHLL).

In addition to the hospital expansions, Keimed, a wholesale distribution company owned by the promoters of the Apollo Group, is set to merge into Apollo HealthCo. This merger is anticipated to be completed within 24 to 30 months. The integration of Keimed is projected to transform Apollo HealthCo into a Rs 25,000 crore integrated pharma distribution company within three years. “Apollo 24×7 will also become neutral to profitable in the next six to eight quarters. When that happens, HealthCo itself will be a large business,” Akhileswaran noted. This path to profitability underscores the company’s commitment to sustainable growth and market leadership.

AHEL’s strategic initiatives are not just about expanding physical infrastructure but also about leveraging technology to enhance patient care. “Going forward, Apollo Hospitals will continue to strengthen its endeavours to identify and introduce best-in-class, technology-enabled healthcare solutions to enhance patient outcomes and improve access to quality care,” said Prathap C. Reddy, Chairman of Apollo Hospitals Group. This vision aligns with the broader objective of creating a resilient healthcare system that ensures the highest standard of care for every individual.

As Apollo Hospitals embarks on this ambitious expansion journey, the focus remains on improving healthcare accessibility and quality through strategic investments and technological advancements. The upcoming hospitals in Mumbai and Bengaluru are set to play a pivotal role in this mission, reinforcing Apollo’s position as a leading healthcare provider in India. With robust financial backing and a clear roadmap, Apollo Hospitals is well-positioned to make significant strides in the Indian healthcare landscape, contributing to a healthier and more resilient future for all.

Read more Business related news on R9 News
Jhumpa Lahiri

Jhumpa Lahiri

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