Apollo Hospitals Q2 profit up 14% to Rs 4,846.9 cr on better patient flows

Apollo looking for another Greenfield hospital in Mumbai is not reported

Apollo Hospitals Enterprise (AHEL) on Thursday posted a 14 per cent rise in profit in the July-September quarter of 2023-24 (Q2FY24) on the back of improved patient flows, as the company laid out an ambitious plan to expand its operations.

AHEL posted a 14 per cent year-on-year (Y-o-Y) jump in revenue from operations to Rs 4,846.9 crore in Q2FY24, and a 14 per cent rise in profit after tax (PAT) to Rs 232.9 crore.

On a quarter-on-quarter (Q-o-Q) basis, the PAT grew 35 per cent, while revenues swelled 9.7 per cent. 

The Q2 consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) stood at Rs 628 crore.

AHEL stock was up 3.78 per cent in the day’s trade on the BSE at Rs 5,304 apiece.

As of September 30, 2023, Apollo Hospitals had 7,765 operating beds across the network (excluding Apollo Health & Lifestyle and managed beds), of which 5,051 are occupied beds.

The overall occupancy for hospitals stood at 68 per cent versus 62 per cent in the trailing quarter, aided by an increase in patient flows.

The consolidated revenues of the healthcare services division increased by 12 per cent to Rs 2,547. 2 crore in Q2FY24, while the diagnostics business revenues crossed a landmark of Rs 120 crore in a quarter during Q2FY24, growing 19 per cent Y-o-Y.

The company said the diagnostic business is poised at a run-rate of Rs 500 crore annually.

Apollo HealthCo revenues grew 17 per cent Y-o-Y to Rs 1,945 crore, the omni-channel healthcare platform, which was formed by merging Apollo’s online and offline pharmacies and telemedicine business in 2021.

Apollo HealthCo is on track for a cash break even in Q4FY24, it said.

Meanwhile, AHEL said it aims to add 2,300 beds across eight locations at Rs 3400 crore over the next three financial years.

The company entered into a binding agreement for a 250-bed hospital asset in Pune, expandable to 425 beds, at an overall cost of Rs 675 crore.

This marks Apollo's entry in Pune, one of the fastest growing cities in India, with a significant demand-supply gap of high-quality healthcare beds for the local population as well as for drain-in markets.

With this move, Apollo will have over 1,000 beds in Maharashtra including Mumbai, Pune, and Nashik. 

The hospital is also expected to be commissioned by the first quarter of the financial year in 2025.

Apollo Hospitals expanded its footprint in East India by acquiring a partially built hospital in Kolkata, with a total capacity of 325 beds.

This addition marks Apollo's second hospital in Kolkata, complementing their flagship facility in the city. Apollo now has five hospitals in Eastern India.

The total bed count in the eastern region is over 800, with plans for an additional 700 beds over the next three years, bringing the total bed count in the region to 2,500.  

Dr. Prathap C Reddy, chairman of Apollo Hospitals Group said: “We are happy to have announced our new hospitals at Pune and Kolkata, and we are forging ahead with our plans to add 2,300 high-quality beds in key geographies over the next three years.”

Krishnan Akhileswaran, the chief financial officer (CFO) of AHEL, told Business Standard they are also scouting for a greenfield hospital in Mumbai. It now has a presence in this region with its Navi Mumbai hospital. This hospital will come up by FY27-28.