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Apollo Hospitals to invest around Rs 1,000 cr over next 2 years

The hospitals chain to cross 10,000 beds mark by this fiscal end


T E Narasimhan  |  Chennai 

Apollo Hospital at Bengaluru
Apollo Hospital at Bengaluru

Hospitals is planning to invest around Rs 1,000 crore over the next two years. The healthcare major said this investment will help the company to add around 1,500 beds and will take overall bed capacity to over 10,500. The company also said it is waiting for approval to raise Rs 750 crore through rights issue.

Krishnan Akhileswaran, chief financial officer, Hospitals Ltd said in the last three years the company added 11 hospitals with around 1,725 beds. This includes two hospitals at Malleswaraj in Bangalore and Visakhapatnam in Andhra Pradesh.

The expenditure incurred during the fourth quarter had impacted net profit marginally, which dropped by around 2% at Rs 75.69 crore.

"We are happy about EBITDA which grew by 5% yearly. During the fourth quarter we have incurred expenditure which resulted in drop in profit marginally," said Akhileswaran.

He added, in the next two years, PAT will move up considering many of the new hospitals will start performing well.

Key focus in the next 12-18 months will be going to be on these new hospitals and can grow and start contributing meaningfully to EBITDA, he added.

Average revenue per bed increased by around 10%. Average length of stay started coming down to 4.17 days from 4.5 earlier since the hospitals have started using robotic procedure and taken other steps to improve efficiency, which will widen the head room for more volume growth.

Akhileswaran said that it will take atleast 18 months for a new hospital to break-even at the EBITDA level.

The company expects hospitals at Tiruchy, Nellore, Nagpur, Perungudi and Nasik end of the fiscal will break-even.

Speaking about investment plan, he said, Navi Mumbai hospital will start by second quarter with 480 beds, this will mark company's foray into Mumbai market. Investment in this project is around Rs 600 crore.

Besides, lined up investment of around Rs 1,000 crore over the next two years and it will increase number of beds of around 1,000 beds.

This year numbers of beds will be increased obver 10,000 beds and end of the Rs 1,000 crore investment plan it will be around 10,500 beds. Apollo Hospitals said it is also open for inorganic growth and said it will look at asset light model to enter Middle East and African markets.

He added, the company is waiting for the approval of rights issue. Hospital want to raise around Rs 750 crore which will help the company to reduce the debt level in the short term.

Three focus areas over the next three years will be to ensure that the new beds becomes profitable and growing meaning fully, enhance clinical differentiators and digital foray for consume outreach. Digital is for appointment, consultations, telemedicines.

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First Published: Thu, May 26 2016. 12:26 IST