Apollo Hospitals plans to invest Rs 3,000 cr, add 2,000 beds in 3 years: MD

Free cash flows will enable health care chain to grow, says Suneeta Reddy

Health care major Apollo Hospitals has completed 40 years of existence and it is known for bringing international patients to India. SUNEETA REDDY, managing director of Apollo Hospitals, spoke to Shine Jacob about the hospital chain’s journey, goals set for 2028, and medical tourism. Edited excerpts from a video interview.

Apollo has around 70 hospitals, 10,000 beds, 400 clinics, and 6,000 pharmacies. What is your roadmap?

The hospital division was very clear. We are adding around 2,000 beds in the next three years. Every year till 2028, we will be adding 700 beds. So there is going to be tremendous growth coming from the hospital division.

In terms of AHLL (Apollo Health and Lifestyle Limited), their focus is on diagnostics and having Rs 1,500 crore of revenue (annually), becoming number one in South (India) and then taking the lead in the North and other parts too. Also, we are focusing on specialty diagnostics. I think for Apollo 24/7 it is definitely a huge opportunity to be number one in every aspect because they already have the omni channel play, so there's nothing restricting them from getting more and more consumers digitally. They currently have about 29 million consumers and they are definitely growing more than 20 per cent year-on-year. This is 20 per cent actual revenue growth, but in terms of GMV (gross merchandise volume), they've grown 147 per cent over last year.

You spoke about expansion plans of 700 beds annually for the next three years. What investment will go into it? Do you have any acquisition plans?

We currently have plans for Rs 3,000 crore for the next three years. This is very manageable and going forward I think that we will be clear, generating free cash flows that will enable us to really grow.

We announced that we made one (acquisition) in Pune. Previous this year, we've made acquisitions in Kolkata, Pune and Guwahati. So we're always you know we're on the lookout. So this projection of 700 beds doesn't include any bolt on acquisitions we might make.

Where do you like India to be in foreign medical tourism and where would you like to see Apollo?

Look at medical tourism; we have really come back to pre-Covid days. Some of our hospitals with connectivity have 15 per cent of our revenue coming from medical tourism. But I think the more important thing to note is why medical tourism and this is clearly a journey of providing world class clinical outcomes at 1/10th of the US cost.

I think not just Apollo but all of Indian healthcare has benefited. And not only Indian healthcare, but I think the government too has earned valuable foreign exchange. So I think it again validates the fact that we are doing world class work at 1/10th of the cost and this will only get bigger.

Thailand is doing a really great job. If you look at the Singapore and Thailand model, that would be a good space to retain. Just as you had the Incredible India campaign, we should really promote Heal in India. If you look at the value proposition, India has a lot to offer in terms of an integrated option, including Ayurveda and allopathy.

I think that what we really need to look at is countries that can't afford to go to places like Singapore and neighbouring countries. We do get patients from Britain and the US but we must remember that these are patients and travel time is a very real logistical problem that they face. So clearly, you know, India's going to be a little bit too far for them to come, especially if they're not keeping good health. So neighbouring countries are our immediate market and as we speak today, we have set up offices, we do a lot of camps in neighbouring countries and I think that our goal is 15 per cent of our revenue to come from medical tourism.

You have completed 40 years of Apollo Hospitals. Can you throw some light on the growth story?

Pre-Apollo, 80 per cent of the patients who would technically go abroad for treatment, are now very much in India. Not just that, patients from 147 countries come to India for treatment now. This is really the impact that Apollo has had on Indian healthcare. Let me say that you know it's the whole system of healthcare that has changed, so Apollo has lifted standards. Of course, it's not only Apollo, that’s treating all of India.

So clearly as you think back, you know the first Apollo Chennai hospital was a major milestone. And those memories of Apollo Chennai, you know, the fact that we did the first paediatric cardiac surgery just being able to really extend that child's life was another milestone. We were the first to introduce private insurance with Apollo Munich. Of course, you know we had to sell that company because we wanted to focus on delivering clinical care.