Analyst Concall
Apollo Hospitals sees digital arm breaking even by Jul-Sep
This story was originally published at 16:52 IST on 11 February 2025
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--Apollo Hospitals: Will open hospitals in Gurugram, Hyderabad by FY26-end
--Apollo Hospitals: To expand sale of insurance pdts on Apollo 24/7 from Apr
--Apollo Hosp: Fall in inflow of Bangladesh patients hit Chennai ops revenue
--Apollo Hospitals: Navi Mumbai facility to post better performance in FY26
--CONTEXT: Comments by Apollo Hospitals mgmt in post-earnings analyst call
--Apollo Hosp: Excluding Bangladesh, Q3 revenue from global patients up 19%
--Apollo Hospitals: Apollo 24/7 to break even by Jul-Sept of FY26
--Apollo Hospitals: Looking for 72-73% occupancy going forward
--Apollo Hospitals: See revenue grow in mid-teens going forward
--Apollo Hospitals: Apollo HealthCo revenue seen at INR 250 bln by FY27
By Narayana Krishna and Aman Aryan
HYDERABAD/MUMBAI – Apollo Hospitals Enterprise Ltd. expects its arm Apollo HealthCo to achieve a revenue of INR 250 billion in 2026-27 (Apr-Mar) and Apollo 24/7 to breakeven by the end of the September quarter or the start of the December quarter of FY26, the company's management said at a post-earnings conference call.
Apollo HealthCo, which is into pharmacy distribution and retailing, houses Apollo 24/7, the digital platform business of Apollo Hospitals. Apollo 24/7 business made earnings before, interest, tax, depreciation, and amortisation loss of INR 1.03 billion in the Oct-Dec quarter. However, excluding the operating costs of 24/7 business, the EBITDA came in at INR 378 million, according to the company's investor presentation.
Apollo Hospitals plans to expand the sale of insurance products on the Apollo 24/7 platform from April onwards, the management said. The platform will sell products of three life insurance companies and three health insurance companies from April. Adding insurance to its portfolio will help the arm to expand its margins as products in this segment have reasonably high margins, the management said.
The health services provider announced its results after market hours on Monday. Apollo Hospitals' consolidated net profit for the December quarter rose nearly 52% on year on the back of a 14% growth in its revenue. The company reported a net profit was INR 3.72 billion on revenues of INR 55.27 billion.
Shares of Apollo Hospitals Enterprise plunged 6.6% on Tuesday despite the company's earnings for the December quarter beating analysts' estimates. The shares ended at INR 6,317.35 on the National Stock Exchange.
A fall in the inflow of patients from Bangladesh at the Chennai facility curtailed the pace of growth in Apollo Hospitals' revenue for the December quarter. Excluding Bangladesh, its revenue from global patients rose 19% on year, the company's management said.
After the political crisis in Bangladesh, patients from the neighboring country fell significantly, impacting total sales by 2.5%. Most patients from Bangladesh come to Chennai and Kolkata hospitals for specialty treatment.
Apollo Hospitals management said it is aiming to increase the hospital occupancy rate to 72-73% from 68% in Oct-Dec. The company said it is also working on expanding its international business to newer locations like Iran, Nepal, Indonesia, West Asia, Sri Lank and South Africa to mitigate the impact of the shortfall in patients from Bangladesh.
The company said it is on track to open its new hospitals and expects to open Gurugram and Hyderabad facilities by the end of FY26. The company also expects its Navi Mumbai hospital to improve its financials in FY26. With the improved occupancy and the focused, large value surgical revenues, the company expects its revenues to see mid-teen growth in the coming few quarters.
The company also expects to improve its average revenue per occupied bed going forward, led by focused, high-value treatments like cardiac, oncology and other specialties. In Oct-Dec, Apollo Hospitals reported a 13% year-on-year growth in its healthcare services revenue to INR 27.85 billion. End
Edited by Saji George Titus
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