Apollo Hospitals' Shares Rally Over 5%, Hit Record-High on Strong Results

Shares of Apollo Hospitals rallied over 5% on the bourses today and hit a record-high, after the company reported a 73% year on year (YoY) increase in revenue at Rs 37.6 bn for the June 2021 quarter.

The company had posted a revenue of Rs 21.7 bn in the same period last year.

The healthy revenue growth was driven by the hospital segment and the pharmacy distribution segment.

The revenue of the hospital segment grew 145% YoY whereas that of the pharmacy business grew 17.7% YoY.

Due to the increase in revenue, the company's EBITDA (earnings before interest, taxes, depreciation, and amortisation) jumped over 1000% YoY to Rs 5.2 bn from Rs 355 m in the corresponding period last year.

EBITDA margins also expanded from 1.6% to 13.8%.

Overall, the company posted a net profit of Rs 2 bn against a loss of Rs 2.1 bn in the same quarter last year.

Key Financial Highlights (June 2020 vs June 2021)

Commenting on the performance, Apollo Hospitals Group Chairman Prathap C Reddy said,

• The first quarter of the new financial year saw Apollo Hospitals facing the Covid-19 challenge anew as the second wave swept across the country.
  
  Our experience over the last year and the dedication of our doctors, nurses and paramedical staff that we emerged through the second wave successfully saving lives and ensuring that no patient suffered for want of care.

Covid-19 cases drive revenue for the hospital and diagnostic segment

In its latest conference call, the management said revenue from the hospital segment grew 145% YoY led by increased occupancy levels and higher average revenue per bed.

The company saw increased contribution from Covid-19 cases due to the second wave which led to higher occupancy level across all regions. New hospitals reported a revenue growth of 175% YoY.

During the quarter, the occupancy across the group stood at 5,108 beds (67% occupancy) compared to 2,742 beds (38% occupancy) in the June 2020 quarter.

The occupancy in mature hospitals stood at 3,500 beds (64% occupancy) whereas new hospitals had an occupancy of 1,607 beds (73% occupancy).

The diagnostics segment also saw a significant uptick due to the second wave.

The company intends to scale up the diagnostics business with an addition of 200-300 collection centres per quarter and significant ramp up of the home collection segment.

Pharmacy business to drive double-digit growth

Apollo 24/7 delivered a healthy performance with 10 m new registrations. The company expects a revenue of US$ 50-60 m for the financial year 2022 primarily driven by the pharmacy business.

The company is targeting an addition of 300-350 stores in 2022 with high double-digit growth supported by Apollo 24/7.

The company has reorganized its segments (Apollo 24/7, backend pharmacies and pharmacy retail business) into a new department called Apollo Health Company.

How the stock markets reacted to Apollo Hospitals June Quarter results today

Shares of Apollo Hospitals opened the day higher at Rs 4,149 on the BSE and Rs 4,416 on the NSE today.

The stock then rallied over 5% after the company posted robust results for the June 2021 quarter.

Over the last 30 days, the company's share price is up by 12.2% and over the last one year, the stock has rallied over 150%.

The scrip touched its 52-week high of Rs 4,374.9 and 52-week low of Rs 1,584.7 on 16 August 2021 and 9 September 2020, respectively.

About Apollo Hospitals

Apollo Hospitals (APL) is an Indian multinational hospital chain headquartered in Chennai, Tamil Nadu, India.

It was founded by Prathap C. Reddy in 1983 as the first corporate healthcare provider in India.

The company has 71 hospitals, with total capacity of 10,261 beds. Of these, the company owns 45 hospitals, including subsidiaries, joint ventures and associates, and manages 5 hospitals.

It also has 11 day-care or short surgical stay centres.

Besides its hospital-based pharmacies, APL runs a wholesale pharmacy distribution business which accounts for 40% of its revenue. The business acts an exclusive supplier to APL and operates a retail pharmacy chain of 3,850 stores.

For more details about the company, you can have a look at Apollo Hospitals factsheet and quarterly results on our website.

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