Tag: Apollo Hospitals

Apollo Hospitals targets ₹500 crore revenue from diagnostics; talks on for e-pharmacy stake sale

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Apollo Hospitals Enterprise is actively engaging in stake sale talks for its omnichannel business, Apollo 24/7, the company’s Managing Director, Suneeta Reddy said while emphasising the importance of fair valuation.

“We have built a lot of value in this company and it should be valued appropriately so that all stakeholders benefit,” Reddy said in an exclusive conversation with CNBC-TV18 on Friday (November 10).

Apollo plans to raise $200 million by diluting a 5-7% stake in the Omnichannel business. The business is expected to reach operational breakeven by the March quarter of the financial year 2024.

Reddy also highlighted the success of the company’s diagnostics business, which is on track to generate ₹500 crore in revenue. Apollo Hospitals plans to expand by opening 200 new diagnostic centres.

Reddy pointed out that these centres “are already EBITDA (earnings before interest, tax, depreciation, and amortisation) positive, with a margin of 9.8%, which is expected to expand as we set up our clinical labs.”

Apollo Hospital posted a 14.2% year-on-year (YoY) increase in net profit at ₹233 crore for the July-September quarter, lower than Street estimates. The revenue, however, was better-than-expected at ₹4,846.9 crore, a 14% YoY growth. EBITDA was at ₹627 crore compared to ₹565 crore the previous year, with the margin at 12.9% versus 13.3%.

Shares of Apollo Hospitals Enterprise were trading 1.09% lower at ₹5,239.80 apiece on the NSE during Friday’s noon deals.

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Apollo Hospitals gears up for ₹3,435 crore expansion; to add 2,300 beds in 3 years

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Healthcare major Apollo Hospitals on Thursday, November 9, announced a ₹3,435 crore capex plan to add 2,300 beds to its existing capacity in the next three financial years, which will be funded through internal accruals and debt financing.

This expansion plan is in line with the plan to expand footprint in identified strategic locations to drive continued business growth and cater to the increasing demand for quality healthcare services across the country, the healthcare provider said in a filing.

“The Board, based on the recommendations of the Investment Committee, has evaluated and approved an expansion plan of the company involving a balance capital outlay of around ₹34,350 million after reckoning for land/ asset acquisition costs already incurred,” it said.

Apollo Hospitals expanded its footprint in East India by acquiring a partially built hospital in Kolkata, with a total capacity of 325 beds. The total bed count in the Eastern region is over l 800, with plans for an additional 700 beds over the next three years, bringing the total bed count in the region to 2500.

The company entered into binding agreement for a 2 50 bed new hospital asset in Pune, expandable to 425 beds. With this expansion, Apollo will have over l 000 beds in Maharashtra including Mumbai, Pune and Nashik, it said in a statement.

“We are happy to have announced our new hospitals at Pune and Kolkata, and we are forging ahead with our plans to add 2300 high-quality beds in key geographies over the next three years,” said Prathap C Reddy, Chairman at Apollo Hospitals Group.

Apollo Hospitals Q2 earnings

Apollo Hospitals also reported its financial results for the September quarter. It posted a 14.2% year-on-year (YoY) rise in net profit at Rs 233 crore for the July-September quarter.

The hospital chain reported better-than-expected revenue at Rs 4,846.9 crore, reflecting a 14% YoY rise.

EBITDA or earnings before interest, taxes, depreciation, and amortization stood at Rs 627 crore in the quarter under review as against Rs 565 crore in the same period last year. The operating margin for the second quarter was reported to be 12.9%.

Following the earnings announcement, shares of Apollo Hospitals Enterprise Limited rallied 4% to trade at ₹5,312.50 on the NSE.

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Apollo Hospitals Q2 Results: Revenue rises 14% to ₹4,847 crore, in-line with estimates

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Apollo Hospitals reported its earnings for the quarter ended September 2023 on Thursday, November 9. The revenue for the quarter under review rose 14% to ₹4,847 crore. 

According to a CNBC-TV18 poll, the second quarter revenue growth was expected at ₹4,770 crore. In the July-September quarter in the previous fiscal, the healthcare company had reported a revenue of ₹ 4,251.07 crore.

However, as expected, the margin fell during the quarter. Profit after tax also gained 14% year-on-year to ₹233 crore, but failed to beat poll estimate. In the corresponding period in the previous year, the company had reported a PAT of ₹213 crore.

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CNBC-TV18 poll had predicted that the second quarter will be relatively soft due to factors such as slightly delayed rains. The healthcare services revenue stood at ₹2,547 crore, up 12% year-on-year. Apollo Diagnostics revenue gained 19% to ₹124 crore, while the digital health and pharmacy distribution revenues came at ₹1,945 crore.  

Healthcare Services EBITDA stood at ₹635 crore, and margin at 24.9%, a 32 basis points year-on-year decline. 

Apollo HealthCo, comprising Apollo 24/7 and the backend pharmacy business, reported the opening of 98 net new stores during the quarter, taking the total number to 5,671 stores. The GMV stood at ₹725.6 crore, a surge of 147% from the previous year.  

Meanwhile, Apollo Health & Lifestyle, the company’s clinic business, posted a 11% rise in revenue during the quarter at ₹354.2 crore. The diagnostic business added over 400 collection centres during the quarter.

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Apollo Hospitals Q2 earnings preview: CNBC-TV18 poll expects revenue growth of 12%, margin may decline

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Apollo Hospitals is set to release its earnings report for the quarter ended September 2023 (Q2FY24) on Thursday, November 9, 2023.

According to a CNBC-TV18 poll, the second quarter revenue growth is expected to reach 12% at ₹4,770 crore, compared to the ₹ 4,251.07 crore reported in the same quarter last year.

However, it is anticipated that the margin will decrease to 12.6% from 13.3% in Q2FY23.

Profit after tax is projected to experience a surge of 38%, reaching ₹293 crore, in contrast to the ₹213 crore recorded in the same quarter the previous year.

The second quarter is expected to be relatively soft due to factors such as slightly delayed rains, resulting in an estimated 7-9% growth in hospital segment revenue. Nevertheless, market participants anticipate an increase in bed occupancy on a quarter-on-quarter basis.

Apollo HealthCo, comprising Apollo 24/7 and the backend pharmacy business, is anticipated to report a year-on-year growth of 15-20%.

Meanwhile, Apollo Health & Lifestyle, the company’s clinic business, is likely to see growth in the range of 3-4%.

Management commentary on fundraising plans and future margins will play a crucial role in influencing the stock’s performance.

On Wednesday, the stock closed at ₹5,116.05 per share, marking a 0.40% decline from the previous day’s closing price. Over the past six months, the stock has registered a gain of 11.39%.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Apollo Hospitals shares end 5% higher as Morgan Stanley, BofA initiate coverage

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Apollo Hospitals ended the day over 5% higher at around ₹5,153 as prominent brokerages Morgan Stanley and BofA initiated coverage on the stock.

Morgan Stanley is “overweight” on the stock with a target price of ₹6,101. Their analysis projects a robust EBITDA (earnings before interest, tax, depreciation, and amortisation) CAGR (compound annual growth rate) of 31% from FY24 to FY26. They peg the return on capital at around 21% by FY26.

According to Morgan Stanley, the key growth drivers will include a substantial 18% CAGR expansion in hospital services EBITDA from FY24 to FY26. Additionally, they anticipate a narrowing of losses in 24/7 e-healthcare services, moving toward breakeven by FY26.

Read Here | Apollo Hospitals’ subsidiary acquires a 325-bed hospital in Kolkata for Rs 102 crore

BofA Securities initiated coverage with a “buy” rating and a target price of ₹6,000. They view Apollo Hospitals as an all-in-one healthcare opportunity.

They see earnings momentum stemming from the hospital and Healthco reaching breakeven as significant triggers for growth.

A note from BofA highlighted the potential for a revaluation based on Apollo’s omnichannel arm, Healthco’s growth prospects, indicating that current valuations are trading at a premium compared to the five-year averages.

This premium reflects increased margin visibility and an improved balance sheet, which provides strong support for future expansion endeavours.

Shares of Apollo Hospitals have remained flat over the past month.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Apollo Hospitals’ subsidiary acquires a 325-bed hospital in Kolkata for Rs 102 crore

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Apollo Hospitals Enterprises on Wednesday (September 27) announced that its subsidiary, Apollo Multispeciality Hospitals, has acquired a hospital in Kolkata in an all-cash deal worth Rs 102 crore. This hospital is still under construction.

As part of the deal, the wholly-owned subsidiary of Apollo Hospitals will get property comprising 1.4 acres of land on which stands a partially constructed hospital building with a built-up area of 74,000 sqft. It will also get medical equipment, the company said in a filing to the stock exchanges.

The partially built hospital has a total capacity of 325 beds. The property, located in Sonapur, was owned by Future Oncology Hospital and Research Centre.

Apollo Multispeciality Hospitals will fund the acquisition through internal accruals.

Apollo Hospitals says the first phase of the hospital, which will house 225 beds spread over 1.75 lakh square feet, will be commissioned in the next 12 months.

The hospital will cater to patients in the eastern region by delivering healthcare services across all broad and high-end specialties including Oncology services with radiotherapy.

“The addition of this new facility is part of our planned capacity expansion across the country and will allow us to serve even more people in the region,” says Suneeta Reddy, Managing Director, Apollo Hospitals.

This is Apollo Hospitals’ second facility in Kolkata, and its fifth in the eastern India. Its location will complement the clinical offering in the existing hospital in Kolkata, the company said.

In eastern India, the company has 1,800 beds across hospitals in Kolkata, Bhubaneswar and Guwahati. It plans to further augment capacity in the region by adding 700 beds over the next 3 years. This will take its total bed count in the region to 2,500.

Apollo Hospitals is India’s largest integrated healthcare platform with over 10,000 beds across 71 hospitals, nearly 6,000 pharmacies and over 200 clinics and diagnostic centers. It also operates 150 telemedicine centers.

Apollo Hospitals shares were trading 0.46 percent higher at Rs 5076.80 on BSE at 11.19 AM.

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This brokerage firm foresees EBITDA growth in hospitals

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Renowned brokerage firm Kotak Institutional Equities has recently turned its spotlight on a particular metric that is often overlooked when evaluating the health of healthcare institutions: per bed profitability. This novel approach aims to shed light on the financial performance of hospitals by examining the growth in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) concerning the number of occupied beds. The question they seek to answer is: how much EBITDA does each occupied bed generate?

According to Kotak Institutional Equities, analysing EBITDA per occupied bed provides a more insightful perspective on the improvement in core profit, especially when considering the impact of bed expansion. By delving into this metric, they hope to offer a comprehensive view of hospital performance and potential investment opportunities.

Kotak Institutional Equities has put forth its estimates for EBITDA per occupied bed, spanning the financial years 2023 to 2028. These projections offer valuable insights into the expected growth rates of various hospitals. It’s anticipated that most hospitals will report a compounded annual growth rate (CAGR) ranging from 8 percent to 10 percent per occupied bed.

Rainbow Childrens Medicare, however, emerges as an outlier with a projected growth rate of around 3 percent, making it one of the lowest performers in this analysis. On the opposite end of the spectrum, Krishna Institute of Medical Sciences (KIMS) is expected to shine with a CAGR of 10 percent, making it one of the highest performers. Meanwhile, Max Healthcare Institute Limited is forecasted to report a robust 9 percent growth rate, while Apollo Hospitals Enterprises, Narayana Hrudayalaya, and Aster DM Healthcare Ltd are all expected to fall within the 8-9 percent range.

In response to their analysis, the brokerage firm has taken specific actions concerning their recommendations for investment in healthcare stocks.

The brokerage firm has downgraded Aster DM from a ‘buy’ rating to ‘add’. However, it’s worth noting that the target price for Aster DM remains higher at around Rs 355, suggesting that there is still growth potential, albeit at a slightly more conservative level.

Kotak Institutional Equities has downgraded KIMS from a ‘buy’ to ‘reduce’. Yet, the target price for KIMS stands at Rs 2,020, indicating that despite the downgrade, the stock still has value in their estimation.

The brokerage firm has issued a ‘reduce’ call for both Rainbow and Narayana, implying a more cautious outlook for these stocks.

Kotak Institutional Equities maintains a ‘buy’ recommendation for Apollo Hospitals, indicating their confidence in its growth prospects. They also suggest adding Medanta to the portfolio, giving it an ‘add’ rating.

For more details, watch the accompanying video.

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UBS maintains a buy rating on Apollo Hospitals with a target of Rs 6,050

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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UBS has maintained a “buy” rating with a target price of Rs 6,050 on the stock of Apollo Hospitals. UBS’s analysts have noted that industry data trends suggest a steady improvement in occupancy rates, which is a key indicator of a healthcare institution’s performance.

Currently, UBS predicts that the occupancy rate for Apollo Hospitals will rise to approximately 65 percent in the second quarter. This marks a notable uptick from the 62 percent occupancy rate recorded in the previous quarter. To provide further context, it’s worth mentioning that during the base quarter, occupancy stood at 68 percent, largely due to the prevalence of vector-borne diseases.

According to the brokerage firm, the average revenue per occupied bed is expected to remain stable on a quarter-on-quarter basis. This implies a significant 15 percent year-on-year growth, suggesting that Apollo Hospitals is well-positioned to capitalise on the increasing demand for healthcare services.

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Furthermore, UBS anticipates that Apollo HealthCo, a subsidiary of Apollo Hospitals, will witness a steady reduction in losses. This reduction is expected to occur sequentially and can be attributed to several factors, including narrowing discounts.

Shares of Apollo Hospitals are trading 2.19 percent lower at Rs 5095.95. In stock has gained more than 5 percent in the past month.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Apollo Hospitals, Max Healthcare and Fortis Health — here’s why this analyst is positive on listed hospitals space

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Improved occupancy level, increasing utilisation of infrastructure and thereby an expected growth in income generation are driving market optimism in the listed hospitals space. Param Desai, Research Analyst at Prabhudas Lilladhar, in a recent interview with CNBC-TV18, expressed a positive sentiments about the listed healthcare service providers.

“We are structurally positive on the space,” said Desai.

“Our preferred picks in the space are Apollo Hospitals, Max Healthcare and Fortis Health,” he added.

According to Desai, one of the key factors driving optimism in the listed hospitals sector is the potential for improved occupancy levels. Many hospital companies have yet to reach the optimal utilization of their infrastructure and resources. This presents a significant opportunity for growth, as increasing occupancy rates would lead to enhanced revenue generation and overall operational efficiency.

The fiscal year 2024 is anticipated to be a turning point for hospital companies, with an expected improvement in occupancy rates.

“We believe that earnings momentum will sustain going forward,” he said.

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Desai believes that despite most hospital companies not having reached the optimum occupancy levels, the upcoming fiscal year 2024 holds promise for improvements in occupancy rates. Additionally, Desai highlighted the growth potential for Fortis through its ongoing brownfield expansion initiatives, which could pave the way for margin expansion.

Desai also highlighted Fortis Healthcare’s strategic approach to expansion, specifically through brownfield projects. Brownfield expansion involves expanding existing facilities to maximize their potential, rather than building entirely new hospitals. Desai believes that Fortis’ ongoing brownfield expansion initiatives offer significant scope for margin expansion. By optimizing existing infrastructure and leveraging economies of scale, Fortis aims to enhance operational efficiency and drive profitability.

As healthcare needs rebound and hospital footfall increases, the listed hospitals sector stands to benefit from these favorable developments, paving the way for sustained growth and profitability.

For more details, watch the accompanying video

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Apollo Hospitals top gainer on Nifty 50 after analysts remain bullish on growth story

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Apollo Hospitals are trading with gains of over 4 percent and are also the top gainers on the Nifty 50 index, after analysts tracking India’s largest hospital chain said that the stock is comfortably placed for secular growth going forward.

25 analysts on the street track Apollo Hospitals, of which, 24 have a buy recommendation. Only one analyst has a sell rating.

Apollo’s management told CNBC-TV18 on Wednesday that it expects to have a better financial year 2024 on an operational level as it expects Apollo 24/7, the omnichannel business to reach EBITDA breakeven, and also sees improvement in margins due to the cost-cutting efforts.

Brokerage firm Jefferies maintained its buy rating on the stock. However, it marginally cut its price target on the stock to Rs 5,300 from Rs 5,375 earlier. It has cut financial year 2024-2025 operating profit or EBITDA estimates by 6 percent and 1 percent respectively to factor in lower margin assumptions. It has maintained its buy rating on the belief that the management will be able to drive up hospital occupancy and reduce losses in Apollo 24/7.

Apollo Hospitals is comfortably placed for secular growth, Nuvama said in its note.

Motilal Oswal has also maintained its buy recommendation on Apollo Hospitals with a price target of Rs 5,450. The brokerage remains positive due to the management’s consistent efforts to improve growth and profitability in the healthcare services business, cost management measures to reduce HealthCo losses, and a robust expansion in pharmacy network across India.

Kotak Institutional Equities raised its price target on Apollo Hospitals to Rs 5,550. It maintained its buy recommendation on the stock and projected overall sales and EBITDA compounded annual growth rate (CAGR) of 18 percent and 24 percent respectively.

Shares of Apollo Hospitals are trading 4 percent higher at Rs 4,804.70. The stock is trading close to its 52-week high of Rs 4,901.95.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow