- 12 Aug 2022
- ICICIdirect Research
Apollo Hospitals' revenues in line, dip in ex-hospitals marginsAPOLLOHOSP - 4285 Change: 11.10 (0.26 %)
News: Consolidated revenues grew 7% QoQ to Rs 3796 crore as Hospitals segments grew 9% QoQ to Rs 2023 crore and HealthCo and Pharmacy grew 8% QoQ to Rs 1479 crore. AHLL reported de-growth of 5% QoQ to Rs 293 crore. EBITDA margins declined 13 bps QoQ to 12.9% (I-direct estimate: 14.6%) mainly on back of increase in other expenditure. EBITDA in absolute terms grew 6% QoQ to Rs 491 crore. Adjusted profit for the quarter was at Rs 317 crore v/s profit of Rs 90 crore in Q4FY22. Delta vis-à-vis EBITDA was mainly due to lower tax and depreciation and interest expense.
View: Apollo Hospitals’ Q1FY23 revenues were more or less in-line with our estimates while margins were missed. Healthcare business returned to normalcy in this quarter and hospitals segments largely captures it as EBITDA margins for hospitals were at 23.9% compared to 21.9% in Q4FY22.. Pharmacy Distribution Business re-organized into a 100% subsidiary Apollo HealthCo Ltd along with Apollo 24/7, the group’s Digital healthcare services platform is making steady progress while also incurring cash burn for digital platform. Apollo 24/7 Operating Costs for the quarter was at Rs135 crore. The Pharmacy business remains a steady growth engine albeit in a changed structure. AHLL (clinics and diagnostics) has witnessed softer quarter while Apollo Diagnostics has set an aspirational target to achieve Rs 1000 crore revenues mark over the next 3 years. Structurally, cost reduction drives, expanding of complex procedures and profitability of new hospitals remain key management focus areas.