Apollo HealthCo to be ₹30,000 crore company in 5-6 yrs, says Shobana Kamineni

“I want a valuation that is like DMart, why not?" executive chairperson of Apollo HealthCo Shobana Kamineni said in an interview. “Because of [our] retail presence, and we'll have an ebitda margin of over 8% in five years, just like any other retail with a large presence. On top of that, I'll have customer stickiness," she added.

In April 2024, Apollo HealthCo raised ₹2,475 crore from private equity investor Advent and merged its online pharmacy Apollo 24|7 with wholesale pharma distributor Keimed. The combined entity was valued at ₹22,481 crore, while the enterprise value (which represents both equity and debt) of Apollo 24|7 prior to the merger was ₹14,478 crore.

 

“India is a market that has grown. I know, for the last 20 years, I've grown pharmacy and other businesses of ours at 20%," said Kamineni. “For the next 10-15 years, we’ll grow at the same rate. So there will be large valuations."

Apollo HealthCo is a subsidiary of Apollo Hospitals Enterprise, and includes an offline pharmacy distribution business, and the digital platform Apollo 24|7 that spans online pharmacy, diagnostics and teleconsultations.

DMart (Avenue Supermarts Ltd), one of India's largest retail chains, currently has a market capitalization of ₹2.8 trillion.

Measured growth

Apollo HealthCo clocked a revenue of ₹9,093 crore in FY25, growing 16% year-on-year. The platform delivered three successive quarters of profitability after breaking even in Q2FY25.

The digital platform, Apollo 24|7, had over ₹3,000 crore in gross merchandize value in FY25. The platform aims to reach profitability by Q4FY26.

“Our growth is measured, but healthy," said Kamineni, adding that the focus is on profitability now. “...I'm not going to let my guys prolificate and discount and just grow because of that. We have to make a profit," she said.

 

The platform started rationalizing spending last year, as it focused on profitability, and is looking at adding more customers as an omnichannel platform.

“One lever is you keep getting new customers. So, those new customers are not coming at the velocity of e-commerce, but it's a steady growth, anywhere between 4-7% a month," Kamineni said. It's not just new users, but also users who continue to come back.

Apollo 24|7 currently has over 40 million registered users and 820,574 daily users as of Q4FY25. Kamineni said that the platform will likely hit 1 million daily users by September.

“We've started taking on the role of a health keeper," she said, explaining that the focus is on making the platform more consumer-centric to increase stickiness.

Apollo HealthCo is increasing its use of AI for this. “If you have an Apollo health record, it automatically populates. Based on that, we have an AI that will nudge you…we personalise it to you," Kamineni said.

The Apollo advantage

Apollo HealthCo is the largest omnichannel platform in India. It operates over 6,600 brick-and-mortar pharmacies, making it the largest retail chain in India.

According to a 2023 RedSeer report, the digital platform’s market share was 18%, hovering below competitor’s Pharmeasy and Tata 1mg.

In the past couple of years, Apollo 24|7 has expanded into various categories, including partnerships with brands like Eli Lilly for its obesity drug Mounjaro, wellness brands, as well as launching 19-minute deliveries of medicines last year, to keep up with the increasing quick-commerce competition.

“The e-pharmacy segment is yet to reach its full potential due to multiple issues," Bhanu Prakash Kalmath S J, partner and healthcare industry leader at Grant Thornton Bharat told Mint. The segment has been facing regulatory hurdles, concerns over data privacy, pushback from chemists, etc."

Most recently, Apollo HealthCo forayed into marketing insurance products as a corporate agent in partnership with insurers.

“I know how tough it is to run an insurance company, and how lovely it is to own the distribution. When you own the customer, and when you can layer your product into it, it becomes a really sweet spot business," Kamineni said.

Amid falling valuations of online pharmacies, Kamineni believes that having the entire Apollo ecosystem, and focusing on a larger omnichannel approach gives them an advantage.

Pharmeasy, once valued at $5.6 billion, saw its valuation drop sharply to $456 million in December 2024 after its investor Janus Henderson slashed the value of its stake by 92%

 

“But a holistic coverage of having an online and store model, covering the wider array of services such as diagnostics, wellness products, etc to address customers and not necessarily patients will help to unlock the full value," Kalmath said.

An omnichannel model, which could cater to a wider demographic would work to a platform’s favour, Kalmath added.

“Fortunately, because we're Apollo, we can play a whole game and we bring the name to the table also," said Kamineni. “We bring scale, we bring name, we bring experience. And for the next 30 to 40 years, you'll see the scale because we have the energy behind it."