“Let’s not think about it from a family lens. Every decision is taken on what is right for the business and shareholders,” Reddy, who heads the country’s largest pan-India hospital chain by revenue, told Rica Bhattacharyya in an exclusive interview. “I speak to my sister (Shobana Kamineni, executive chairperson of the spun-off entity) every other day. We work very closely,” she said.
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The hospitals and pharmacy-digital businesses have very different economics, return profiles and growth drivers, making separation critical for value creation.
Was Apollo’s restructuring an exercise in future-proofing governance – something family led groups often do to bring clearer ownership and leadership accountability?
What we do at Apollo is never from a family lens. It is what is good for the company. A lot of Apollo 24/7 (India’s largest online pharmacy and digital health platform) business is retail… it is a different business, the ROCE (return on capital employed) is different, it is measured differently, and the workforce is different. The spin-off was aimed at creating value for shareholders. It was always a thought that this company needs to be separate; it must be more efficient and benefit all shareholders. Apollo HealthCo (holding company for pharmacy distribution and digital health businesses), which is on track to get listed by FY27, will grow at 20% while the hospitals business is seen growing at 18% over next three years.
Apollo has been at the forefront of India’s healthcare transformation for decades. How do you define the company’s mission today?Our transformation is into preventive healthcare with non-communicable diseases accounting for over 60% of the total disease burden. We have genetic disposition towards cardiac problems, incidences of cancer are rising by 18% every year, and we have the largest diabetic population in the world. So, our focus will be on prevention.
The hospital chain has added beds selectively rather than aggressively in recent years. What is the next phase of expansion in the business?
Metros will continue to be a part of our expansion plans as well as Tier-I cities. We have significant focus on Delhi and Gurgaon. Tier-II cities are also emerging markets where we want to expand presence. India remains a land of opportunity for healthcare with less than 70,000 private beds in the country and the disease burden increasing. We are happy to work with asset-light models. We will also remain open to acquisitions.
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You’ve led Apollo through major strategic shifts. What has been your most significant pivot so far?
One of the key changes has been the realisation post Covid that we need more hospitals like Apollo and the investments that have come into healthcare are more than dramatic. We are going back to strengthening our presence in Tier I as well as going back to Tier II and building the network. While we had all of these in different verticals — including healthcare services, retail healthcare & diagnostics arm Apollo Healthcare & Lifestyle, and digital and pharmacy business Apollo HealthCo — the significant thing that is now happening is the integration between all verticals. Next pivot will come from the government — it has done a great job rolling up insurance. Now the private sector needs to work in tandem so that more people continue to invest.
What are the key strategic priorities over the next five years?
Currently, we have three strong verticals that are growing at a healthy pace. We are well-poised to serve our growing geriatric population as well as millennials. And then we have the third cohort — Gen Z — who will require a different kind of relationship with health. Their interventions will encompass preventive health, lifestyle and nutraceuticals, so that we can leverage all the learnings we have from the earlier cohorts.
We continue to remain early adopters and leaders in technology. Our investments in telemedicine and AI-powered clinical intelligence have the potential to scale our high-quality clinical offerings to large populations.
How is Apollo preparing for leadership succession and a smooth transition to the next generation?
As far as the next generation is concerned, they have already started contributing to various aspects of the business. We have tailored mentorship programmes in place for each of them. We are keen on ensuring that their contribution prepares them for succession as well as builds new streams of growth.