Apollo HealthCo-Keimed Merger Targets INR 25,000 Cr Revenue By FY27

The integration with Keimed is aimed at strengthening supply chain reach, as Keimed already supplies to over 6,000 pharmacy outlets, including Apollo’s own network.

Apollo Hospitals is moving ahead with its platform simplification strategy, with HealthCo, its digital and allied businesses, set to be demerged from the parent company and merged with Keimed.

The combined entity is planned for a separate listing by the fourth quarter of FY27.

Management expects the merged company to generate around INR 25,000 crore in revenue with approximately seven percent EBITDA margin at listing, supported by scale benefits, operating leverage and tighter cost controls.

The integration with Keimed is aimed at strengthening supply chain reach, as Keimed already supplies to over 6,000 pharmacy outlets, including Apollo’s own network.

Margins at Keimed are projected to rise from about 3.1 percent to 3.5 percent as volumes increase. Apollo is also shifting its online pharmacy strategy toward sustainable unit economics, moderating discounts below industry norms and reducing customer acquisition costs in its 24/7 business.

The digital unit is targeting gross merchandise value of Rs 3,000–3,200 crore in FY26, with break-even expected by the end of that year and annual growth of 20–25 percent thereafter. Partnerships with insurers such as Niva Bupa, Care and Star Health are operational, and the SBI tie-up is bringing in repeat, higher-quality customers.

The offline pharmacy division plans to add around 600 stores in FY26 and is projecting 17–18 percent revenue growth, with margin improvements driven by private label expansion. While competition is intensifying with e-commerce players entering prescription delivery, Apollo sees this as expanding the overall category and expects its trust, compliance and logistics advantages to hold.

Apollo HealthCo’s leadership is setting ambitious growth targets. Shobana Kamineni, Executive Chairperson, said, “We want a crackerjack, banging demerger,” adding that by the time Apollo HealthCo lists, its turnover will be “probably as much, if not more than the hospitals.”

The combined entity will bring together Apollo 24/7, offline pharmacy operations, Keimed’s third-party pharma distribution and Apollo Hospitals’ telehealth services. Prathap C Reddy, Chairman, Apollo Hospitals Group, said, “The omnichannel pharmacy business and integrated digital healthcare ecosystem will be a unique model to enable access to high-quality healthcare for millions of Indians. What Apollo Hospitals achieved for the creation of the private healthcare industry in India, this new entity will create for the digitally forward generation of tomorrow.”

AHEL Managing Director Suneeta Reddy said the parent company will continue focusing on healthcare delivery while the new entity drives customer engagement, market penetration and growth under clear capital allocation plans.

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