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Apollo Hospitals Q4FY22 Review: Q4 subdued due to Omicron, geared for growth

ICICIdirect Research 27 May 2022 DISCLAIMER

What's Buzzing:

 Apollo Hospitals' Q4FY22 results were below I-direct estimates as Omicron affected two-third of the quarter.


Consolidated revenues grew 24% YoY to Rs 3546 crore. Hospitals segments grew 21% YoY to Rs 1863 crore vs. I-direct estimate of Rs 1946 crore. HealthCo and pharmacy grew 23% YoY to Rs 1374 crore. AHLL reported growth of 47% YoY to Rs 309 crore. EBITDA margins declined 130 bps YoY to 13.1%, mainly on the back of increase in other expenditure. EBITDA in absolute terms grew 12.5% YoY to Rs 463 crore. Adjusted profit for the quarter was at Rs 90 crore vs. profit of Rs 150 crore in Q4FY21.

Our perspective:

Occupancy in this quarter, across the group was at 58% compared to 63% in Q4FY21 and 65% in Q3FY22. The healthcare business returned to normalcy in March, 2022 with a rebound in patient visit and elective procedures. Structurally, Apollo is likely to improve margins on the back of cost reduction drives, expanding of complex procedures and profitability of new hospitals. AHLL remains a key management focus area with diagnostics surpassing Rs 100 crore revenues this quarter. Pharmacy business remains a steady growth engine albeit in a changed structure, being re-organised into Apollo HealthCo along with Apollo 24/7, the group’s digital healthcare services platform. The management is guiding for ~500 new pharmacies in FY24, with revenues likely to grow in high teens. Apollo has a strong healthcare pedigree and asset base. The company is on course to integrate all entities digitally to leverage its brand and physical presence.

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