Apollo to expand operations in Chennai cluster

Apollo Hospitals Enterprise Ltd (AHEL) plans to decongest the bed capacity in its Chennai Cluster, a major cluster for the hospital chain in the country, by moving some of the services from its existing hospitals to other facilities.

The hospital chain, which considers Chennai and Hyderabad as separate clusters along with another cluster of hospitals in smaller cities in its standalone operations, is expected to invest around Rs 512.7 crore in the Chennai cluster by fiscal 2015, according to a recent company document.

It is planning to decongestion its main hospital in Chennai by shifting its outpatient division to a nearby facility. This, along with a similar effort to move another specialty from the facility, would help it add around 180 new beds in the existing facility apart from its ongoing efforts to add around 685 beds in the Chennai cluster through new hospitals and expansions by fiscal 2015. AHEL has around 1,100 beds in the cluster.

“The process of decongesting the existing facilities in Chennai would be completed in six to eight months. This will add around 180 beds in the existing hospital within the period,” said K Padmanabhan, group president, Apollo Hospitals, in a recent conference call with analysts.

Of the upcoming bed addition plans in Chennai, a 200-bed Ayanambakkam facility with an expected investment of Rs 70 crore was launched recently and has 100 beds operational at present. The other plans include setting up a 45-bed super specialty hospital on the outskirts of the city, a 350-bed super specialty hospital in South Chennai at an investment of Rs 294 crore and a 60-bed women’s and child superspecialty hospital for an investment of Rs 74 crore and a 30-bed addition to the main facility in Chennai.

The decongestion programme, along with the new bed additions, would help the company improve its average revenue per operational bed (ARPOB) in one of the major business clusters. It expects a growth of 12-14 per cent in ARPOB from the Chennai cluster for the next three years.

The decongestion programme, along with the new bed additions, would help the company improve its average revenue per operational bed (ARPOB) in one of the major business clusters of AHEL. The company expects a growth of 12-14 per cent in ARPOB from the Chennai cluster for the next three years, they added.

Its earnings update for the second quarter of the present fiscal reports that the Chennai cluster, in the first half of the present fiscal, had an ARPOB of Rs 29,519 a day compared with Rs 26,363 a day for the same period previous fiscal — around 12 per cent growth.

This is in comparison with a 7.2 per cent growth in ARPOB for AHEL’s consolidated operations for the first six months of the fiscal, showing a growth from Rs 19,809 per operating bed a day during the first half of last fiscal year to Rs 21,236 a day for the same period of this fiscal year. The overall bed occupancy rate for the first six months of the fiscal year was 76 per cent as against occupancy rate of 72 per cent during the same period of previous fiscal year.