Apollo Hospitals lifts margin, but trails healthcare peer median
Revenue growth outpaced costs year on year, while a higher tax rate limited the conversion of pre-tax profit into net profit.
Filed 20 May 2026, 17:54 IST · after market close · Apollo Hospitals Enterprise Ltd (APOLLOHOSP)
Key takeaways
- Consolidated operating profit grew 31.35% year on year as revenue growth of 18.12% outpaced expense growth of 16.01%.
- Operating margin rose 1.55 percentage points year on year to 15.31%, but remained 8.07 percentage points below the 23.38% median for 48 reporting healthcare peers.
- The stock gained 2.85% on the first trading day after the results, close to its 2.63% median move after the previous eight results.
Price around the results
Revenue growth widened the operating profit base
Consolidated revenue grew 18.12% year on year and 1.98% sequentially, while operating profit rose 31.35% year on year and 4.73% sequentially. The margin expansion reflects costs growing more slowly than revenue: expenses increased 16.01% year on year and 1.49% sequentially. Management said four new hospitals had been commissioned with about 855 census beds, with 670 beds still to be operationalised over the next 12-18 months.
Margin improved, but the peer gap remains wide
Operating margin increased 1.55 percentage points year on year and 0.41 percentage points sequentially, extending the improvement from 13.76% in Q4FY25 to 15.31% in Q4FY26. This was the fourth consecutive quarter above the prior-year Q4 margin, and the highest margin in the five-quarter trend shown. Apollo's margin was 8.07 percentage points below the 23.38% median of 48 healthcare peers and ranked seventh from the bottom.
Higher tax rate softened profit conversion
Profit before tax grew 39.96% year on year, faster than net profit growth of 33.00%, as the tax rate rose 4.00 percentage points to 23.59%. Sequentially, the tax rate fell 0.71 percentage points, helping net profit rise 6.78% even as interest expense increased 5.77%. Other income accounted for 7.48% of pre-tax profit, so it was a meaningful but not dominant contributor to reported earnings.
Expansion remains the main execution marker
Management said the healthcare services expansion programme has a total project cost of about Rs 8,300 cr, with about Rs 5,100 cr still to be spent. The company said total census beds are expected to reach approximately 13,100 after expansion, and that the Gurgaon, NCR hospital asset acquisition is expected to be commissioned in FY27. Management also said Apollo continues to evaluate bolt-on acquisitions in selected Tier-1 cities and metros.
The initial market response was within Apollo's usual range
The stock rose 2.85% on the first trading day after the results, with a 3.52% gain after one day and a 5.19% gain after 15 days. The first-day move was only modestly above the 2.63% median absolute move following the previous eight results, when the stock rose after five and fell after three. Trading volume was 3.5 times the reference level on the first day.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹6,606 cr | ₹6,477 cr | +1.98% | +18.12% |
| Other income | ₹54 cr | ₹49 cr | +11.34% | -24.58% |
| Expenses | ₹5,595 cr | ₹5,512 cr | +1.49% | +16.01% |
| Operating profit | ₹1,011 cr | ₹965 cr | +4.73% | +31.35% |
| Operating margin (%) | 15.31% | 14.90% | — | — |
| Interest | ₹119 cr | ₹113 cr | +5.77% | +3.75% |
| Depreciation | ₹224 cr | ₹219 cr | +2.37% | +6.35% |
| Profit before tax | ₹722 cr | ₹682 cr | +5.79% | +39.96% |
| Tax | ₹170 cr | ₹166 cr | +2.72% | +68.51% |
| Net profit | ₹551 cr | ₹516 cr | +6.78% | +33.00% |
| EPS (₹) | ₹36.82 | ₹34.94 | +5.38% | +35.87% |
Operating margin of 15.31% compares with a Healthcare sector median of 23.38% across 48 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +2.85% | +2.87% |
| Next session | +3.52% | — |
| 5 sessions | +1.21% | +1.68% |
| 15 sessions | +5.19% | — |
| 30 sessions | +10.03% | — |
Volume on the results session was 3.50× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Apollo coordinated three organ transplants in one day through green corridors.
Guidance & outlook
- The company expects the Gurgaon, NCR hospital asset acquisition to be commissioned in FY27.
- Post expansion, total census beds are expected to reach approximately 13,100.
Expansion
- Four new hospitals were commissioned with approximately 855 census beds; 670 beds remain to be operationalized over the next 12-18 months.
- The healthcare services expansion plan has a total project cost of approximately ₹8,300 crore, with approximately ₹5,100 crore yet to be spent.
- Hyderabad's expansion plan comprises 715 total beds and 570 census beds across four projects.
- Karnataka's expansion plan comprises 820 total beds and 675 census beds across three projects.
- The Northern Region expansion plan comprises 1,122 total beds and 890 census beds across four projects.
- The company continues to evaluate bolt-on acquisitions in selected Tier-1 cities and metros.
New initiatives
- Apollo Diagnostics expanded its test menu to include new TB, cancer, allergy, CMML, cytometry, nicotine, Kala-azar and hepatitis tests.
- Apollo HealthCo has started work on CRM 2.0.
- Apollo HealthCo is using the Polygon and Omni acquisition strategy as a consistent source of new customer acquisition.
- Apollo Diagnostics activated Apollo Pharmacy stores as a new offline channel.
Problems & risks
- The Amazon partnership was discontinued.
- Apollo HealthCo excluded the closure of a non-profitable corporate partner from its reported growth comparison.
What to watch
- Whether consolidated operating margin holds above 15.31% after four quarters of year-on-year improvement.
- Progress on operationalising the 670 beds management said remain from the four newly commissioned hospitals.
- The timing of the Gurgaon, NCR hospital asset acquisition commissioning that management said is expected in FY27.