- 14 Aug 2024
- ICICI Securities
APOLLO HOSPITALS Q1FY25 RESULTS- WELL-ROUNDED GROWTH WITH MARGIN EXPANSION
APOLLOHOSP - 6723 Change: 16.20 (0.24 %)News: Revenues grew ~15% YoY to ₹ 5086 crore, driven by growth across segments. EBITDA grew 33% to ₹ 675 crore and EBITDA Margins improved 175 bps to 13.3%, driven by improved profitability at AHLL (Diagnostic and Retail Healthcare) and Apollo HealthCo (Digital Healthcare and Omni-channel Pharmacy platform). Healthcare services division (Hospitals) revenues grew 15% YoY to ₹ 2637 crore on the back of new beds addition (up 2%), increase in occupancy (up 600 bps to 68%) and 2% increase in ARPOB to ₹ 59073. EBITDA growth was at 15% and EBITDA margins stood at 23.6%. Apollo HealthCo grew 15% YoY to ₹ 2082 crore drive by 15% growth in Offline Pharmacy distribution to ₹ 1837 crore, and 20% growth in Online Pharmacy Distribution & Apollo 24X7 to ₹ 245 core. This segment has turned EBITDA positive with EBITDA of ₹ 22.5 crore. AHLL revenues stood at ₹ 366 crore up 15% YoY driven by primary care and diagnostics. and EBITDA margins stood at 8.4%.
Views: The hospitals business has maintained strong profitability with optimum case mix and payor mix. The company has embarked upon a new capex plan to add 2860 beds with a spend of over ₹ 3400 crore in the next 4 years across India. Apollo HealthCo post 24x7 and ESOP charges turned EBITDA positive during the quarter. Structurally, cost reduction drives, expanding of complex procedures and profitability of new hospitals remain key management focus areas. That said, recent Advent investment in Apollo HealthCo at a potentially lower valuation and proposed merger of promoters-owned Keimed Private Limited, India's leading wholesale pharmaceutical distributor, is likely to weigh on sentiments in the near term.
Impact: Positive