India's Apollo Hospitals misses Q4 profit estimates on higher expenses

Max Healthcare Institute

30/05/2024 15:39

By Kashish Tandon
       BENGALURU, May 30 (Reuters) - Indian hospital chain
operator Apollo Hospitals  APLH.NS  slightly missed
fourth-quarter profit estimates on Thursday, as higher expenses
offset revenue growth in its healthcare services business. 
    Consolidated net profit rose nearly 76% to 2.54 billion
Indian rupees ($30.5 million), missing analysts' average
estimates of 2.65 billion rupees, according to LSEG data.
    The company, which runs over 70 hospitals across the
country, said revenue from the healthcare services business, its
biggest revenue generator, rose 16%, driving overall revenue up
15% to 49.44 billion rupees, in line with analysts' estimates of
49.43 billion rupees.
    "The results are largely in line with our estimates, though
the pharmacy distribution business revenue fell short by 5%,"
said Dhara Patwa, an analyst at SMIFS Institutional Research.
    Apollo Hospitals plans to add over 2,000 beds by fiscal
2027.
    Revenues at hospital chains, including Apollo and Max
Healthcare  MAXE.NS  have been boosted by increased capacity and
the number of surgeries.
    However, an over 13% climb in total expenses ate into
revenue growth. 
    Moreover, the company's digital health and pharmacy
business, which is the second-biggest by revenue with a 40%
contribution, continued to pressure Apollo Hospitals' profit as
it reported a loss for the seventh straight quarter.
    The unit, which offers online consultations and operates the
"Apollo 24/7" platform, has been grappling with soaring costs
due to its cash-guzzling pharmacy vertical.
    The company had earlier said it aims to turn this unit
profitable by the end of fiscal 2024 by moderating spending.
  The company's margins on earnings before interest, tax,
depreciation and amortization (EBITDA) also improved due to
reduced losses from 24/7 operations, Patwa added. 
      
($1 = 83.2650 Indian rupees)

 (Reporting by Kashish Tandon in Bengaluru; Editing by Ravi
Prakash Kumar)
 ((Kashish.Tandon@thomsonreuters.com; 8800437922;))