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Informist, Wednesday, Jul 24, 2024

By Narayana Krishna

HYDERABAD – Healthcare services and pharmacy retailing major Apollo Hospitals Enterprise Ltd is expected to report a 40% increase in June quarter consolidated net profit, reaching 2.3 bln rupees, according to an average of estimates from five brokerages. The Chennai-based company's revenue for the quarter is projected to rise by 15% year on year to 50.8 bln rupees, driven by improved occupancy in the hospitals segment and consolidation of pharmacy operations, analysts said.
 

Analysts' estimates for Apollo Hospitals' Apr-Jun net profit range from 2.7 bln rupees lowest by Kotak Institutional Equities and nearly 3 bln rupees, the highest by Motilal Oswal. For revenues, estimates vary from Motilal Oswal's 50.1 bln rupees to Nomura Equities 51.2 bln rupees. Sequentially, Apollo Hospitals' net profit is expected to decline 8%, while revenues are projected to rise by 3%. The company has not yet announced the date for its Apr-Jun earnings.

Nomura forecasts a 15% year-on-year growth in Apollo Hospitals' business, with a 7-8% increase in average revenue per operating bed, which was 57,760 rupees a year ago. Apollo Hospitals operates India's largest hospital chain, with nearly 10,000 beds across 73 hospitals as of Mar 31. HDFC Securities anticipates a 15% year-on-year growth in the hospitals business, while Kotak Institutional Equities projects a 13% growth due to improved occupancy.
 

The Apollo HealthCo, a holding company of Apollo Hospitals' pharmacy business, is expected to report robust sales growth from store expansion and the acquisition of distribution company Keimed. Kotak Institutional Equities forecasts a 19% year-on-year growth in pharmacy operations revenue, while Nomura expects 17% growth for the quarter. Apollo has over 6,000 pharmacies in 1,100 cities across the country. Analysts also expect the company’s digital health platform, Apollo 24/7, to reduce operational costs, improving margins.

Analysts predict Apollo Hospitals' June quarter earnings before interest, tax, depreciation, and amortisation, or EBITDA, margins to improve due to lower Apollo 24/7 expenses and better margins in the hospitals business. Nomura expects Apollo Hospitals' consolidated EBITDA margin to reach 13.4%, an expansion of 186 basis points year-on-year, while Kotak Institutional and HDFC Securities predict it at 13.2%, an improvement of around 170 basis points for the quarter.

The average estimate from five brokerages for Apollo Hospitals' Apr-Jun EBITDA is 6.8 bln rupees, with estimates ranging from 6.7 bln rupees to 6.8 bln rupees. Analysts are also looking for updates on capacity expansions in Pune, Hyderabad, Kolkata, New Delhi, and Gurgaon. Additionally, market participants are closely watching the growth of Apollo Health and Lifestyle Ltd, the holding company of clinics and diagnostic services.

The company has not yet announced the date to release its earnings for Apr-Jun. Today, Apollo Hospitals shares ended at 6,422.60 rupees on the National Stock Exchange, up 0.3% from its previous close. 

Following are the Apr-Jun earnings estimates for Apollo Hospitals Enterprise Ltd based on reports compiled by Informist from five brokerage houses:

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Edited by Akul Nishant Akhoury

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