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Apollo Hospitals to Strengthen Offline Pharmacy Network with 500-600 New Outlets

Written by : Aishwarya Sarthe

August 21, 2023

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In FY23, the combined pharmacy business recorded INR 8,238 Cr revenue, a substantial rise from INR 6,768 Cr in FY22. This growth was primarily fueled by including 1,012 new stores in the preceding fiscal year, following the addition of 411 stores in FY22.

Apollo Hospitals Group, is set to augment its offline pharmacy network by adding 500-600 new outlets. This strategic move aims to achieve INR 10,000 Cr revenue by the end of the current fiscal year.

The offline pharmacy distribution sector has transformed since being incorporated into Apollo Healthcare Enterprises' hospital business. On March 16, 2022, the pharmacy distribution division was transferred to Apollo Health Co Ltd, a wholly-owned Apollo Hospitals Enterprises Limited (AHEL) subsidiary. This transition encompassed offline and online pharmacy distribution and the incorporation of the digital healthcare platform Apollo 24/7 under Apollo HealthCo.

In the financial year (FY) 2023, the combined pharmacy business recorded revenues of INR 8,238 Cr, a substantial rise from INR 6,768 Cr in FY22.

This growth was primarily fueled by including 1,012 new stores in the preceding fiscal year, following the addition of 411 stores in FY22.

During Apollo Hospitals Group's Q1 earnings call, Obul Reddy, CFO of the Pharmacy division, disclosed a more measured approach in Q1 FY24. This approach was prompted by adding approximately 380 stores in the previous quarter, allowing these new establishments time to stabilise.

Reddy reaffirmed the organisation's projection of establishing a presence of 500-600 stores in FY24. The first quarter of the ongoing fiscal year saw the inauguration of 43 new stores, bringing the total count to 5,573 outlets as of June 2023.

Despite Apollo's growth in its omnichannel pharmacy venture, a notable segment'”20%'”of its pharmacies is still working towards breaking even. Reddy indicated that these outlets might require another quarter or two to achieve profitability.

The omnichannel pharmacy business displayed revenue growth in Q1 FY24, reaching INR 2,246 Cr compared to INR 1,808 Cr in the corresponding quarter of the previous fiscal. The online segment witnessed a year-on-year increase of 59%, while the offline counterpart expanded by 21%.

Through expanding its pharmacy network and optimising distribution channels, Apollo Hospitals aims to make healthcare more accessible to the Indian populace. Notably, the emergence of competitors such as 1mg, PharmEasy, and the established presence of Medplus in the offline pharmacy landscape signals a competitive dynamic.

Previously, Apollo Hospitals introduced an innovative 5G-connected ambulance service in Kolkata. This specialised ambulance is equipped with state-of-the-art medical equipment, patient monitoring applications, and telemetry devices, facilitating the swift transmission of patient health data to the hospital with minimal delay.


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