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earnings | IST

Apollo Hospitals Q2: Margins aided by cost reduction, asset utilization; 400-beds to be added in 2 years

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CNBC-TV18 caught up with Suneeta Reddy, MD, Apollo Hospitals Group,  to discuss the quarter gone by and the outlook, Reddy explained that cost reduction and asset utilisation is aiding margins. She also said that they plan to add 400-beds in the next 2 years

Apollo Hospitals posted a strong set of numbers for the second quarter. It was a good performance on the revenue front, margin was led by recovery in the hospitals business. It reported an over fourfold jump in its consolidated net profit to Rs 267.41 crore for the quarter ended September 30. The company had posted a net profit of Rs 58.99 crore for the corresponding period of the previous fiscal. Its consolidated revenue from operations stood at Rs 3,717.07 crore for the quarter under consideration. It was Rs 2,760.72 crore for the same period a year ago.
To throw more light on the quarter gone by and the outlook, CNBC-TV18 caught up with Suneeta Reddy, MD, Apollo Hospitals Group.
She said in the next 24 months, they are looking to add 400 beds. "This quarter, we have operationalized around 250 beds. We still have headroom to operationalize another 1000 beds within our existing system,” she added.
“Currently, we have a capex of Rs 250 crores which is equal to depreciation. We have made an acquisition in Guwahati and with that, we have expanded our presence there to 400 beds. In Kolkata, we are looking at some expansion that will reconsolidate our presence there. Moving forward, we have plans in Bombay, which is on a revenue-share model and one in Delhi. Beyond that, there is a brownfield expansion happening at our sites in Bengaluru that will add another 300 beds," she said.
“Margins are improving because of the focus on cost reduction, asset utilisation and focus on Centres of Excellence, said Reddy. So, the mature hospitals are at about 26.4 percent and new hospitals came in at 17.4 percent but overall, it was 650 basis points improvement, led by focus on Centres of Excellence, which is high-end surgery, and occupancies are picking up in the new hospitals as well, so it is a combination of both,” she explained.
On revenues, she said that out of the total revenues of Rs 3,717 crore, only 5 percent came from COVID. Growth in the other segments has been very strong led by surgical growth, which has gone up by about 40 percent. We believe that this is a sustainable growth, she added.
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On HealthCo, she said, “If you look at 24x7, in terms of revenues, we are pretty much on track. We have reached a pace where we are doing about 45,000 daily deliveries. Moreover, our footfalls into the pharmacy have grown from four to five lakhs. So 24x7 platform is really encouraging consumers to use the omnichannel, whether it is the pharmacy or online pharmacies. We have also done over three lakh tele consultations for this half here and 10 lakhs for the past 24 months. The tele-consult platform is also ramping up. Having said that, the diagnostic business showed a very good trajectory this year; it grew by 56 percent this quarter. We have hired 900 phlebotomists to be able to serve the people on the 24x7 platform.”
For the entire interview, watch the video