- 07 Nov 2024
- ICICI Securities
APOLLO HOSPITALS Q2FY25 RESULTS- WELL-ROUNDED GROWTH WITH MARGIN EXPANSION
News: Revenues grew ~15% YoY to ₹ 5589 crore, driven by growth across segments. EBITDA grew 30% to ₹ 816 crore and EBITDA Margins improved 165 bps to 14.6%, 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 14% YoY to ₹ 2903 crore on the back of new beds addition (up 3%), increase in occupancy (up 500 bps to 73%) and 3% increase in ARPOB to ₹ 59011. EBITDA growth was at 14% and EBITDA margins stood at 24.9%. Apollo HealthCo grew 17% YoY to ₹ 2282 crore drive by 18% growth in Offline Pharmacy distribution to ₹ 2014 crore, and 16% growth in Online Pharmacy Distribution & Apollo 24X7 to ₹ 268 core. This segment has turned EBITDA positive with EBITDA of ₹ 52.1 crore. AHLL revenues stood at ₹ 404 crore up 14% YoY driven by primary care and specialty care and EBITDA margins stood at 10.3%.
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 3560 beds with a spend of over ₹ 5000 crore in the next 4 years across India. Apollo HealthCo post 24x7 and ESOP charges has already turned EBITDA positive during Q1. Structurally, cost reduction drives, expanding of complex procedures and profitability of new hospitals remain key management focus areas. On the HealthCo front, besides improving financials, proposed integration of promoters-owned Keimed Private Limited, India's leading wholesale pharmaceutical distributor, would be the key exercise to watch for. We wait for management commentary on the numbers.
Impact: Positive