Apollo Hospitals and Max Healthcare Outperform Expectations in Q1 FY27

The Indian healthcare sector witnessed a strong performance in the June quarter, with Apollo Hospitals and Max Healthcare outperforming expectations. While both hospital chains delivered healthy operating metrics, Apollo Hospitals stood out with its hospital revenue growth, operating performance, and stock returns.

Strong Q1 Performance by Apollo and Max

Both Apollo Hospitals and Max Healthcare posted consolidated sales growth of 21 per cent and 15.3 per cent year-on-year (Y-o-Y), respectively. The hospitals segment saw growth of 22 per cent for Apollo Hospitals, with established hospitals growing 18 per cent. The hospital segment’s performance was led by 11 per cent volume growth in acute therapies, 4 per cent growth in pricing, and a 3 per cent uptick in case and payor mix.

Key Drivers of Apollo’s Growth

The hospital segment’s performance was driven by 11 per cent volume growth in acute therapies, 4 per cent growth in pricing, and a 3 per cent uptick in case and payor mix. Insurance and self-pay accounted for most of the revenues and grew 25 per cent and 16 per cent, respectively, over the year-ago period.

Market Impact and Details

Apollo Hospitals posted consolidated sales growth of 21 per cent Y-o-Y, driven by the hospitals segment’s growth of 22 per cent.
The hospital segment’s performance was led by 11 per cent volume growth in acute therapies, 4 per cent growth in pricing, and a 3 per cent uptick in case and payor mix.
Max Healthcare delivered 15.3 per cent revenue growth in Q1 FY27, led by higher volumes and better realisation.

Key Takeaways

Apollo Hospitals outperformed expectations with its hospital revenue growth, operating performance, and stock returns.
The hospital segment’s performance was driven by 11 per cent volume growth in acute therapies, 4 per cent growth in pricing, and a 3 per cent uptick in case and payor mix.
Max Healthcare delivered 15.3 per cent revenue growth in Q1 FY27, led by higher volumes and better realisation.

FAQs

What are the key drivers of Apollo’s growth?

The hospital segment’s performance was driven by 11 per cent volume growth in acute therapies, 4 per cent growth in pricing, and a 3 per cent uptick in case and payor mix.

What is the outlook for Max Healthcare?

Analysts are positive on Max Healthcare, with Choice Institutional Equities expecting 24-27 per cent growth in revenues and profit over the next three years.

What is the expected impact of the pharmacy demerger on Apollo Hospitals?

The pharmacy demerger is expected to conclude by Q4 FY27, which will unlock value for Apollo Hospitals, according to analysts led by Amey Chalke of the brokerage.