Apollo Hospitals (Q4 FY13)

India Infoline News Service | Mumbai |

The growth in hospital segment was muted due to extended weekend holidays during the quarter leading to lower inpatient volumes.

CMP Rs950, Target Rs1,000, Upside 4.7% 
  • Apollo Hospitals recorded standalone revenues growth of 14% yoy to Rs.8.5bn, below our estimate of Rs8.8bn. Consolidated revenues expanded 12.9% to Rs9.5bn compared to Rs8.3bn in Q4FY12.

  • The miss was largely led by disappointing results for hospital segment. Revenues of the hospital division consisting of hospital services, hospital-based pharmacies and consulting, increased by just 11% in the quarter to Rs5.6bn.

  • The growth in hospital segment was muted due to extended weekend holidays during the quarter leading to lower inpatient volumes. However, the pharmacy business growth, at 20.3% yoy, was strong, led by higher revenue per store and the addition of pharmacies

  • Apollo Hospitals comercilaised 340 beds in the quarter. Higher cost pressure along with addition of news beds adversely impacted the margins. The reported EBITDA margin declined 47bps yoy to 15.7%.

  • The lower revenue and margin along with higher interest cost, should have resulted in lower net income. However, the lower effective tax rate assist PAT to grow by 19.7% yoy, to Rs710mn.

  • Chennai cluster (1,267 bed), the largest of the company, recorded muted growth of 10.3% yoy. The lower growth in 4QFY13 was due to decrease in occupancy levels and extended weekend holidays. Hyderabad clusture grew by just 7.5% but improvement in occupancy level, ARPOB growth along with the lowering ALOS was notable in this quarter. Management commented that the growth was driven by volume growth in neuro, ortho and onco segments. We expect improvement in both occupancy and ARPOB in the next year. Others cluster revenues grew by 15.8% yoy largely led by 500 bps growth in occupancy at 76%. Even the newer hospitals continued to display steady progress and improvement in operating parameters.

  • The pharmacy division maintained a steady growth momentum with a 20.3% yoy growth in revenue. The EBIT margin in the pharmacy division increased by 20bps yoy to 1.7%. Buying efficiencies,  operating leverage and higher contribution from private labels are the drivers for the margin. Apollo Pharmacies (SAPs) added 139 new net stores Q4 FY13 leading to total capacity of 1,503 operational stores currently. The new store addition will get impacted in FY14 due to delay in receiving licenses for new stores. 

Quarterly Business mix
Particulars Q4FY13 Q4FY12 %yoy Q3FY13 % qoq
Income From Each segment        
Healthcare Services 5,627 5,070 11.0 5,653 (0.5)
Pharmacy 2,859 2,377 20.3 2,905 (1.6)
Others 91 65 40.9 80 13.2
Less: Inter-segmental Revenue 3 2 52.9 0 -
Total 8,574 7,510 14 8,638 (1)
Profit before Tax and Int          
Healthcare Services 990 923 7.3 1,134 (12.6)
Pharmacy 49 36 34.2 55 (10.8)
Others 91 65 40.9 80 13.2
Less:Interest 208 155 34.2 193 7.6
PBT - -   -  
Capital Employed 922 869 6 1,076 (14)
Healthcare Services 28,839 22,521 28.1 28,687 0.5
Pharmacy 3,147 2,716 15.9 3,023 4.1
Others 4,969 4,457 11.5 5,716 (13.1)
Total 36,955 29,693 24.5 37,426 (1.3)
Source: Company, India Infoline Research
 
Results table (Standalone)
QUARTERLY -(Rs mn) Q4FY13 Q4FY12 % yoy Q3FY13 % qoq
Net Sales 8,483 7,446 13.9 8,558 (0.9)
(Inc)/Decrease in stock 100 (65) (254.9) (402) (124.9)
Material consumption (2,145) (2,033) 5.5 (2,606) (17.7)
Purchase of Traded Goods (2,178)
BSE 1,198.20 [6.95] ([0.58]%)
NSE 1,198.10 [8.80] ([0.73]%)

***Note: This is a NSE Chart

 

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