Apollo Hospitals Q1: Analysts up targets, share outlook; buy, sell or hold?

For Q1FY26, Apollo Hospitals' consolidated revenue grew 15 per cent year-on-year (Y-o-Y) to ₹5,842 crore, driven by all three business segments.

Apollo Hospitals in focus after Q1 results: Hospital chain operator Apollo Hospitals Enterprise posted a strong set of results for the first quarter of FY26 (Q1FY26), with double-digit revenue growth and robust profitability, leading most brokerages to raise their target prices and reiterate a ‘Buy’ rating on the stock – though Nomura remains cautious with a ‘Neutral’ stance.

 

Solid topline and profitability gains

 

For Q1FY26, consolidated revenue grew 15 per cent year-on-year (Y-o-Y) to ₹5,842 crore, driven by all three business segments. Healthcare Services (HCS) revenue stood at ₹2,935 crore, up 11 per cent Y-o-Y, while Apollo Health & Lifestyle Limited (AHLL) clocked ₹435 crore, a 19 per cent Y-o-Y rise. Apollo HealthCo, the company’s digital and pharmacy distribution arm, reported ₹2,472 crore in revenue, also up 19 per cent Y-o-Y.

 

Apollo 24/7, the digital healthcare platform, achieved a gross merchandise value (GMV) of ₹682 crore for the quarter.

 

At the operating level, consolidated Ebitda grew 26 per cent Y-o-Y to ₹852 crore. HCS Ebitda came in at ₹718 crore (up 15 per cent Y-o-Y), AHLL reported ₹40 crore (up 31 per cent Y-o-Y), and Apollo HealthCo posted ₹94 crore. Meanwhile, consolidated PAT jumped 42 per cent Y-o-Y to ₹433 crore, aided by cost efficiencies.

 

Expansion and strategic focus

 

Apollo Hospitals’ chairman Prathap C Reddy said, “I am proud to see the resilient comeback in the first quarter of FY26, building on the strong foundation of Q4FY25. Q1FY26 has delivered another robust set of results, with revenue growth in the double digits at 15 per cent Y-o-Y and continued improvement in margins.”

 

The quarter saw Apollo announce an aggressive expansion plan to add over 4,300 beds in the next five years with an investment of ₹7,600 crore. The first phase of 2,000 beds is already underway, including a 200-bed acquisition in Bengaluru and a planned 500-bed greenfield hospital in the city’s suburbs. Expansions are also in progress in Hyderabad, Patna, and Jaipur.

 

On the digital front, Reddy highlighted Apollo 24|7’s sustained growth, saying it demonstrated “the continuing strong demand for teleconsultations, lab and pharmacy deliveries”. The demerger of its digital health and pharmacy business, approved last quarter, is now in implementation, aimed at “focused capital allocation and sharper growth plans” for both hospital operations and the omnichannel healthcare ecosystem.

 

Brokerage views and outlook

 

Nuvama Institutional Equities said Apollo’s Q1FY26 Ebitda beat consensus estimates by 6 per cent due to a sharp 20 per cent Y-o-Y reduction in Apollo 24/7 costs. “HealthCo growth was impressive at 19 per cent Y-o-Y while the hospital's was in line with muted expectations (+11 per cent Y-o-Y). We expect hospitals business to gain pace from H2FY26 aided by phased bed expansion, uptick in international patients and improving specialty mix,” the brokerage noted. Nuvama retained its ‘Buy’ rating, raising its target price (TP) to ₹9,010 from ₹8,635, and lifted FY26E/FY27E Ebitda estimates by 2 per cent and 4 per cent, respectively.

 

Motilal Oswal echoed the bullish view, raising its target to ₹9,010 from ₹8,720 and maintaining a ‘Buy’ call. It said profitability beat estimates on cost optimisation and projected a 15 per cent/21 per cent/28 per cent CAGR in revenue/Ebitda/PAT over FY25-27.

 

Avendus also reiterated a ‘Buy’, increasing its target to ₹8,765 from ₹8,515, according to reports. It advanced the online business Ebitda breakeven timeline to FY27 from FY28 earlier, factoring in the proposed AHCo-Keimed merger (April 2026) and APL front-end acquisition (April 2027).

 

Nomura, however, maintained a ‘Neutral’ rating with a sum of the parts (SOTP)-based target of ₹6,856. It said Q1FY26 revenue was in line with expectations, but Ebitda was 5 per cent ahead, supported by stronger margins across segments. PAT beat its estimate by 20 per cent due to lower depreciation and interest costs. Healthcare Services revenue rose 11 per cent Y-o-Y, aided by 3 per cent inpatient volume growth and an 11 per cent rise in ARPP, though occupancy slipped 300 bps Y-o-Y to 65 per cent. Apollo HealthCo revenue grew 19 per cent Y-o-Y with GMV up 23 per cent, and AHLL posted 19 per cent growth, driven by strong diagnostics performance despite some margin pressure. 

 

Thus, Nomura analysts valued Healthcare Services at 25x forward EV/Ebitda and noted the stock is trading at 30.7x/25.7x FY26F/FY27F EV/Ebitda.

 

Road ahead

 

Apollo Hospitals’ management expects double-digit revenue growth to sustain through FY26, supported by new hospital openings, ongoing digital innovations, and government partnerships for community health initiatives.

 

Analysts also see scope for value unlocking through restructuring moves and potential listings, with Nuvama highlighting the possibility of a HealthCo listing within the next 18 months.

 

With a combination of hospital expansion, digital momentum, and operational efficiency gains, Apollo Hospitals is positioned to remain a key focus in the healthcare sector in the near-to medium-term – though Nomura’s more cautious stance signals that valuation comfort could be a limiting factor for some investors.