Earnings Outlook
Low occupancy to cap Apollo Hospitals Q1 PAT at 7-qtr low
This story was originally published at 12:45 IST on 9 August 2025
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By Narayana Krishna
HYDERABAD - Slow growth in overall occupancy and a fall in international patient footfall in the hospitals business are likely to weigh on Apollo Hospitals Enterprise Ltd.'s June quarter consolidated earnings. The Chennai-based healthcare services company is expected to report its lowest net profit growth in seven quarters on a year-on-year basis due to a moderate growth in the hospitals business, according to analysts.
Analysts project Apollo Hospitals' June quarter consolidated net profit to rise 21% on year but fall 5% on quarter to INR 3.7 billion, based on the average of estimates from six brokerages. JM Financial Institutional Securities Ltd. remains bullish on Apollo Hospitals' net profit with the highest estimate at INR 3.9 billion, while HDFC Securities Ltd. has the lowest estimate at INR 3.5 billion.
Apollo Hospitals' June quarter revenue is seen at INR 57.2 billion, up 13% on year and 2% on quarter, according to estimates. Nuvama Wealth Management Ltd. projected the highest revenue at INR 57.7 billion, while Kotak Institutional Equities projected the lowest at INR 56.6 billion.
The company is scheduled to announce its June quarter earnings on Tuesday.
HDFC Securities and Kotak expect Apollo Hospitals' revenue from the hospitals business to grow 10% in the June quarter, driven by lower occupancy and single-digit growth in average revenue per occupied bed or ARPOB — a key metric in the hospitals segment. The decline in occupancy is mainly attributed to reduced patient inflow from Bangladesh and parts of the West Asia region, analysts said.
Due to political uncertainty in Bangladesh, patient visits from the neighbouring country for specialty treatments and surgeries have dropped significantly. As of March, revenue from international patients accounted for nearly 7% of Apollo Hospitals' consolidated revenue.
Motilal Oswal Financial Services Ltd. and Nuvama Wealth expect Apollo's hospitals business to have a soft April–June quarter, even as they project 13% year-on-year growth in consolidated revenue.
Analysts remain positive on Apollo Hospitals' pharmacy operations subsidiary, Apollo HealthCo Ltd. and its diagnostics and clinics arm, Apollo Health & Lifestyle Ltd., as both are expected to report healthy double-digit growth for the June quarter. According to Kotak, the pharmacy business is projected to see 13% year-on-year sales growth for the quarter, while the diagnostics arm is expected to post an 11% growth. Nuvama Wealth projects 15% year-on-year revenue growth for the pharmacy business.
Analysts also expect Apollo Hospitals' earnings before interest, tax, depreciation and amortisation margins to improve due to a decline in operating expenses of its digital platform, Apollo 24/7. While Kotak expects the EBITDA margin for the June quarter to expand by 50 basis points year-on-year to 13.8%, HDFC Securities projects a 26-basis-point rise to 13.5%. The average of estimates from six brokerages pegs Apollo Hospitals' June quarter EBITDA at INR 7.9 billion, with individual estimates ranging from INR 7.8 billion to INR 8.1 billion.
Analysts are also looking for updates from the company on the status of bed additions across regions, the progress of the proposed demerger of Apollo HealthCo. and the outlook for improving average revenue per occupied bed in FY26.
On Friday, shares of Apollo Hospitals ended at INR 7,084.50 on the National Stock Exchange, down 1.2%. The stock has risen nearly 3% since the company announced its March quarter earnings.
Of the 12 brokerage reports on the company available with Informist, 11 have a 'buy' rating with an average target price of INR 8,179, while one brokerage has a 'hold' rating with a target price of INR 6,856.
Following are the Apr-Jun earnings estimates for Apollo Hospitals Enterprise Ltd. based on reports from six brokerage firms in the descending order by the estimate of net profit:
|
Brokerage name |
Net Sales |
Net Profit |
EBITDA |
|
|
--in million rupees-- |
||
|
JM Financial Institutional Securities Pvt Ltd |
57,500.00 |
3,893.00 |
8,100.00 |
|
Motilal Oswal Financial Services Ltd |
57,362.00 |
3,836.00 |
7,801.00 |
|
Nuvama Wealth Management Ltd |
57,714.00 |
3,665.00 |
7,936.00 |
|
Prabhudas Lilladher Pvt Ltd |
56,816.00 |
3,656.00 |
8,021.00 |
|
Kotak Institutional Equities |
56,621.00 |
3,592.00 |
7,804.00 |
|
HDFC Securities Ltd |
57,383.00 |
3,549.00 |
7,766.00 |
|
Average |
57,232.67 |
3,698.50 |
7,904.67 |
End
US$1 = INR 87.66
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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