Apollo Hospitals PBT grows 39.3% in Q2 on higher occupancy, new business

Promoters' pledged shares to come down to 20-25 per cent in a month

Apollo Hospitals Enterprise Ltd on Thursday reported 39.3 per cent growth in profit before tax for the July-September quarter to Rs 133.65 crore, against Rs 95.92 crore during the same period last year.
 
Its total income grew 17.8 per cent to Rs 2,844.24 crore during the quarter, against Rs 2,414.97 crore in the corresponding period a year ago. Promoters’ pledged share was expected to come down to 20-25 per cent in a month, said A Krishnan, chief financial officer, AHEL.
 
The company’s retail healthcare services business subsidiary, Apollo Health and Lifestyle Ltd, broke even on earnings before interest, tax, depreciation and amortisation (Ebitda) during the quarter. 

 

Krishnan said the factors that helped achieve growth included a higher occupancy of around 70 per cent in all its matured hospitals. It was also aided by 17 per cent volume growth in new hospitals.
 
"Overall new hospitals are now run-rating at over Rs 100 crore a year in Ebitda. New hospitals are at 8.4 per cent Ebitda margin; we expect it to reach high teens in the next couple of years. Mature hospitals are at 22.2 per cent Ebitda and this will get to 23 per cent Ebitda margin over time," he said.
 
He added that the company’s profit before tax had also seen an impact of the implementation of Ind AS 116 accounting standards.

 
Speaking about the outlook for the year, he said the momentum should continue into the next half year and the company would continue to work on the maturity of its new hospitals and increasing margins from them.
 
"This will also result in healthy cash flows as we move forward and there will be further debt reduction from the current level," he said. The standalone net debt was a little over Rs 3,000 crore, which is 2.5 times its Ebitda and that was a comfortable level, he added.
 
The promoters’ pledged shares, a cause for concern in the market in the past couple of quarters, is also expected to reach a comfortable level in near future.

 
"The Apollo Munich transaction is expected to fructify over the next month; it is in the final leg of regulatory clearances. Once they come, we hope to see pledged promoter shares also coming down to a manageable 20-25 per cent level," said Krishnan. The promoter group shareholding in AHEL was around 30.80 per cent at the end of September, 2019, of which around 66.19 per cent was pledged according to a regulatory filing.