Apollo Hospitals' focus on healthcare segment fuels positive outlook
₹57,760, up 11% year-on-year, and segment's profits at ₹264 crore, up 19% year-on-year. Overall occupancy was 62% and the company plans to achieve more than 70% over the next two years, Group CFO Akhileswaran Krishnan said. Analysts at Motilal Oswal Financial Services said that., “We remain positive on Apollo Hospitals due to its sustained healthy growth/ profitability in healthcare services.
Its efforts to achieve breakeven in Healthco during 4QFY24, also is another key factor that adds to their confidence. New hospitals are expected to witness double-digit growth in volumes with revenue for new hospitals higher at 23% during Q1 and margins around 16.7%. The company is targeting 20% margins by year-end, driven also by increasing numbers of international patients and recovery of medical tourism revenues to pre-covid levels, Krishnan added.
Further support comes from retail and insurance segments, with year-on-year growth at 21% (compared to overall healthcare services growth of 13%). Apollo Hospitals is also planning to add 2,000 beds with an investment of over ₹3000 crore in key metros over the next four years. The company's current operating beds across the network total 7,798, with 2,380 of those in 14 new hospitals.
The company's focus on tower specialties including cardiac, onco, neuro, nephro, gastro, and ortho, which contribute to 63% of inpatient revenues, continues to drive growth. Apollo's profit in Q1 was impacted by higher costs and operating losses at its wholly-owned subsidiary, Apollo HealthCo Ltd. (AHLL), but these are declining sequentially.
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