Earnings Outlook
Hospital, pharmacy ops to keep Apollo Hosp numbers healthy
This story was originally published at 23:06 IST on 28 May 2025
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By Narayana Krishna
HYDERABAD - Continued growth in the hospitals and pharmacy businesses is likely to keep Apollo Hospitals Enterprise Ltd.'s March quarter earnings healthy, according to analysts. An improvement in average revenue per occupied bed and a rise in in-patient volumes are expected to drive the company's earnings growth for the quarter under review.
The Chennai-headquartered Apollo Hospitals is expected to report a net profit of INR 3.64 billion for the March quarter, up 43% on year but down 2% sequentially, based on the average of estimates from 10 brokerages. Analyst projections for the March quarter net profit of Apollo Hospitals range from a low of INR 3.28 billion by Nomura Equity Research and ICICI Securities Ltd. to a high of INR 4.27 billion by Equirus Securities Ltd.
The company's revenue for the quarter is projected to rise 13% on year and 1% on quarter to INR 55.85 billion, according to estimates. Revenue projections range from a low of INR 53.75 billion by Motilal Oswal Financial Services Ltd. to a high of INR 57.70 billion by Equirus.
The hospitals business accounts for over 50% of the company's consolidated revenue, while around 41% comes from its pharmacy and digital operations subsidiary Apollo HealthCo Ltd. Other subsidiaries, including the clinics arm Apollo Health & Lifestyle Ltd., contribute the remaining portion.
Analyst estimates for Apollo's hospitals business revenue growth in the March quarter have a wide range, between 8% and 14% year on year. Most analysts project strong growth in patient volumes and a rise in average revenue per occupied bed. However, Nomura, Motilal Oswal, HDFC Securities Ltd., and Nuvama Wealth Management Ltd. expect a slowdown in the hospitals segment revenue growth due to festivals and a decline in international patients. Apollo Hospitals is scheduled to announce its March quarter earnings Friday.
Equirus expects strong growth in the hospitals business, driven by higher average revenue per occupied bed and improved occupancy. The firm also expects robust pharmacy business, aided by new store openings, to support consolidated revenue growth.
BANGLADESH EFFECT
Kotak Institutional Equities projects 10% year-on-year sales growth in the hospitals segment for the March quarter, with 5-6% year-on-year increase in average revenue per occupied bed and a volume pick-up despite a decline in patient inflows from Bangladesh.
Political uncertainty in Bangladesh has drastically reduced patient footfall from the country. A large number of patients from
Bangladesh typically visit the Chennai and Kolkata units of Apollo Hospitals to undergo super-specialty treatments. As of Dec. 31, international patients accounted for 6% of the company's total hospitals business. During the September quarter earnings call, Apollo Hospitals had said it could take a few more quarters to restore patient traffic from Bangladesh.
Nomura estimates growth in the hospitals segment to slow to 8.5% on year in the March quarter, as occupancy was adversely affected by reduced revenue from medical tourism. The brokerage says a slowdown in patient inflows from Bangladesh is likely to have led to a revenue loss of INR 1.40 billion to INR 1.50 billion during the quarter. Festival holidays and events like the Kumbh Mela also affected revenue. Nomura expects the company's March quarter average revenue per occupied bed, a key performance metric, to grow 6–7% on year.
Nuvama expects the pharmacy business, led by Apollo HealthCo, to record 20–21% year-on-year sales growth. It also expects gross merchandise value on the digital platform Apollo 24/7 to improve to INR 7.92 billion, up 4% sequentially. Motilal Oswal sees strong execution across diagnostics and the primary and secondary care clinics driving 7.4% year-on-year growth in revenue for Apollo HealthCo.
IMPROVING MARGINS
Most analysts expect the March quarter earnings before interest, tax, depreciation, and amortisation margin of Apollo Hospitals to improve, supported by better occupancy, a higher share of specialty surgeries, and stable Apollo 24/7 operating costs. Analyst estimates for the latest quarter's EBITDA margin range from 13.1% to 14.3%, with the average of 10 brokerage estimates for EBITDA at INR 7.65 billion.
Analysts will focus on the company's commentary on expansion plans, outlook for average revenue per occupied bed, and EBITDA margin. The outlook for Apollo 24/7's operating costs is also a key factor to watch this quarter.
Wednesday, Apollo Hospitals shares closed 1.7% lower at INR 6,956.50 on the National Stock Exchange. The stock has risen over 3% since the company released its December quarter results Feb. 10.
Following are the Jan-Mar earnings estimates for Apollo Hospitals Enterprise Ltd. in INR million, based on reports from 10 brokerage firms in descending order of net profit:
|
Brokerage |
Net Sales |
Net Profit |
EBITDA |
|
Equirus Securities Pvt. Ltd. |
57,701.00 |
4,274.00 |
8,150.00 |
|
Elara Securities (India) Pvt. Ltd. |
55,647.00 |
3,806.00 |
8,346.00 |
|
Choice Equity Broking Pvt. Ltd. |
56,669.00 |
3,728.00 |
7,876.00 |
|
Kotak Institutional Equities |
55,686.00 |
3,698.00 |
7,546.00 |
|
Nuvama Wealth Management Ltd. |
56,698.00 |
3,667.00 |
7,779.00 |
|
HDFC Securities Ltd. |
55,167.00 |
3,617.00 |
7,683.00 |
|
Prabhudas Lilladher Pvt. Ltd. |
56,450.00 |
3,534.00 |
6,405.00 |
|
Motilal Oswal Financial Services Ltd. |
53,753.00 |
3,516.00 |
7,689.00 |
|
Nomura Equity Research |
56,097.00 |
3,277.00 |
7,335.00 |
|
ICICI Securities Ltd. |
54,593.00 |
3,275.00 |
7,643.00 |
|
Average |
55,846.10 |
3,639.20 |
7,645.20 |
End
US$1 = INR 85.36
Edited by Rajeev Pai
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