The 84-year-old director and producer has been undergoing treatment at Kaveri hospital since December 3, hospital sources said.
"He is being treated at our hospital now. At present he is stable and all necessary treatments are being given," a hospital bulletin said.
Balachander, a recipient of several awards, including Dadha Saheb Phalke Award, is known as one of the trendsetters in Indian cinema.
Balachander who was earlier a government servant, later forayed into theatre were he carved a niche for himself. He started his journey in films by penning dialogues before finally moving to direction.
Balachander is credited with discovering actors like Kamal Haasan and Rajinikanth through his films 'Arangetram' and 'Apoorva Raagangal'.
His other notable films include 'Aval Oru Thodarkadhai', 'Avargal', 'Varumaiyin Niram Sivappu', Hindi film 'Ek Duje Ke Liye', 'Thanneer Thanneer', 'Achamillai Achamillai' and 'Sindhu Bhairavi' and 'Oru Veedu Iru Vaasal' among others.