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Informist, Wednesday, Oct. 29, 2025

 

By Narayana Krishna

 

HYDERABAD - Growth in the pharmacy business is likely to help Apollo Hospitals Enterprise Ltd. report double-digit sales growth for the September quarter, analysts said. Growth in pharmacy segment sales is likely to be primarily driven by the offline distribution business, but the company's core hospitals segment may witness single-digit growth due to lower occupancy and a fall in patient footfall, according to analysts tracking the company.

 

Apollo Hospitals is expected to report a consolidated net profit of INR 4.5 billion, up 19% on year and 4% on quarter, according to the average of estimates from six brokerages. The company's net sales for the quarter are seen up 11% on year and 7% on quarter at INR 62.3 billion, the estimates show.

 

Nuvama Wealth Management Ltd. is the most bullish on Apollo Hospitals' September quarter net profit and has the highest estimate of INR 4.7 billion, while JM Financial Institutional Securities Pvt. Ltd. has the lowest estimate of INR 4.1 billion. For net sales, JM Financial had the highest estimate at INR 64.5 billion, while Prabhudas Lilladher Pvt. Ltd. had the lowest estimate at INR 60.7 billion. Apollo Hospitals will detail its September quarter earnings on Nov. 6.

 

Apollo Hospitals is expected to report 8% on-year growth in its hospitals business, according to projections from brokerages HDFC Securities Ltd., Kotak Securities Ltd., and Nuvama. Lower-than-expected dengue cases and fewer admissions are likely to impact the hospitals business for the quarter, according to JM Financial. The average revenue per patient, the new metric that Apollo Hospitals now follows, is expected to increase 6% on year, Kotak Securities said. Companies in the healthcare industry follow average revenue per occupied bed as a key metric to gauge their financial performance. The hospitals segment accounts for nearly 47% of the company's consolidated sales.

 

Besides the hospitals business, the Chennai-based Apollo Hospitals operates a pharmacy business through its arm Apollo HealthCo Ltd. and a clinics and diagnostics service through another subsidiary, Apollo Health & Lifestyle Ltd.

 

The pharmacy business is expected to see nearly 15% on-year growth for the latest quarter, according to estimates from HDFC Securities, JM Financial, and Kotak Securities. Nuvama expects the pharmacy business to grow 17% on year for the quarter. Apollo Hospitals is in the process of demerging its pharmacy business along with its digital healthcare services platform, Apollo 24/7, into Apollo HealthCo.

 

The company's consolidated earnings before interest, tax, depreciation, and amortisation margin for the quarter is expected to expand 20 basis points to 14.8%. Apollo Hospitals' EBITDA margin for the reporting quarter is seen in the range of 14.0% to 15.1%, according to estimates. The company's EBITDA margin for the year-ago quarter was 14.6%. The average of estimates from six brokerages pegs the company's EBITDA in the September quarter at INR 9.1 billion. Estimates for the EBITDA were in the range of INR 8.9 billion to INR 9.3 billion.

 

Progress on the restructuring of Apollo HealthCo, the status of the expansion of the hospital's business, and commentary on patient inflows from Bangladesh and other countries are the key areas analysts will track. Growth in the occupancy ratio and levers to improve the average revenue per patient are also factors that will be tracked.

 

Of the 13 research reports on the company available with Informist, 12 have a 'buy' or equivalent rating on the stock with an average target price of INR 8,486, while one has a 'hold' rating on the stock with a price target of INR 6,856.

 

The stock has risen over 14% since the announcement of the company's June quarter earnings. At 1214 IST, shares of the company were at INR 7,870.50 on the National Stock Exchange, down 0.1% from the previous close. 

 

Following are the Jul-Sept earnings estimates for Apollo Hospitals Enterprise Ltd. from six brokerage firms in the descending order by the estimate of net profit:

 

Brokerage	Net sales	Net profit	EBITDA
	--in million rupees--
Nuvama Wealth Management Ltd	62,608	4,742	9,235
Kotak Institutional Equities	62,127	4,726	9,180
HDFC Securities Ltd	62,404	4,636	9,280
Prabhudas Lilladher Pvt Ltd	60,703	4,456	9,161
Motilal Oswal Financial Services Ltd	61,369	4,373	8,898
JM Financial Institutional Securities Pvt Ltd	64,500	4,080	8,900
Average	62,285.17	4,502.17	9,109.00

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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