CRISIL Ratings Limited has reaffirmed its ‘CRISIL AA+/Positive’ rating for Apollo Hospitals Enterprise Ltd’s long-term bank facilities and instruments. The short-term rating is reaffirmed at ‘CRISIL A1+’. This rating action reflects Apollo Hospitals’ strong market position in the healthcare services business and expectations of further solidifying its presence and strong operating efficiencies. Revenues are estimated to grow by 12-15% in fiscal year 2026.
Rating Rationale
CRISIL Ratings has revised the outlook on the long-term ratings to Positive from Stable and reaffirmed the ratings at ‘CRISIL AA+’. The short-term ratings have been reaffirmed at ‘CRISIL A1+’.
Key Strengths
Apollo Hospitals has a strong market position in the Healthcare services business (HCS), consolidating its presence as the largest private healthcare provider in the domestic market with a network of 51 hospitals and over 8,500 operational beds across India. The company benefits from diverse segmental, geographical and pan India presence. The rating is also supported by strong and improving operating efficiencies of the HCS business and better profitability in pharmacy distribution business. Liquidity is robust with cash surpluses at Rs.3,222 crore as of September 30, 2025.
Financial Performance
Consolidated revenues are estimated to grow by 12-15% year-over-year to over Rs.24000 crores in fiscal 2026, driven by growth across its healthcare services segment, pharmacy business, diagnostics and retail health businesses. Operating margins are expected to improve by approximately 100 bps in fiscal 2026 supported by operating profitability in healthcare business (23-25%).
Proposed Demerger
The proposed demerger of AHL is expected to be completed within the next 15-18 months. Post this demerger, AHEL will continue to deliver mid-teen revenue growth with EBITDA margins of approximately 23-24% supported by the superior margin profile of its HCS business.
Capex and Liquidity
AHEL plans to incur capital expenditure (capex) of approximately Rs 6000 crore towards the addition of approximately 3,600 census beds and Proton cancer centre in the next 3-5 years. The company’s financial profile will continue to be robust backed by healthy annual cash accruals of over Rs.2000 crores. Liquidity is robust with cash and cash surplus of over Rs 3200 crore as on September 30, 2025. Debt/EBITDA is estimated at approximately 1.65 times in fiscal 2026.
Acquisition
On September 12th, 2025, the board of directors of AHEL approved the acquisition of 30.6% stake held by IFC in AHLL for a purchase consideration of Rs 1254 crores. This acquisition is expected to be completed by the end of fiscal 2026.
Source: BSE
