Q3FY24 Preview: Apollo Hospitals Enterprise: Revenue seen at ₹48,734 Million, PAT at ₹2,276 Million

7 Feb 2024 , 10:52 AM

Result date: February 8, 2024

Recommendation: Buy

Target price: ₹6,530

December quarter is seasonally a weak quarter for Hospital and Diagnostic companies, owing to the festive season and lower infection rates. However, analysts at IIFL Capital Services believe, the softness this time around will be further amplified for hospital and diagnostic companies due to disruptions from cyclone/floods in Chennai and Tamil Nadu.

Apollo Hospitals Enterprise could witness weakness in occupancy on a sequential basis due to the cyclone in Tamil-Nadu. Lower occupancies would impact ARPOB (Average Revenue per Occupied Bed) sequentially.

Analysts at IIFL Capital Services believe the company’s hospital margins would get impacted by ~100 basis points sequentially, due to lower occupancies. They have assumed sequential decline in Apollo 24/7 losses as management focusses on reducing operating costs. Margin improvement led by reduction in Apollo 24/7 losses would be offset by lower margins in the hospitals business.

Profit After Tax or PAT could inch down 1% on a sequential basis.

Important management insights to watch out for:

• Improvement in occupancy levels
• Reduction in losses of Apollo 24/7
• Update on stake sale in AHL

₹ Million	December 2023 estimates	YoY change	QoQ change
Revenue	48,734	14%	1%
EBITDA	6,023	19%	(4)%
EBITDA margin	12.4%	51 bps	(59) bps
Profit After Tax	2,276	45%	(1)%

Source: IIFL Research