Moneycontrol
Feb 14, 2017 04:10 PM IST | Source: CNBC-TV18

Apollo Hospitals upbeat on Q4; sees EBITDA margins around 12%

Apollo Hospitals Chief Financial Officer Krishnan Akhileswaran said the pharmacy business got a boost from demonetisation because people were allowed to use their old notes (Rs 500, Rs 1000).


Apollo Hospitals reported better than expected numbers for the third quarter ended December led by growth in the pharmacy segment.


Chief Financial Officer Krishnan Akhileswaran said the pharmacy business got a boost from demonetisation because people were allowed to use their old notes (Rs 500, Rs 1000). Though the impact on hospitals was not good, they were compensated by good numbers from pharmacy business, said Akhileswaran in an interview to CNBC-TV18.


Pharmacy grew by 29 percent in the quarter, he said and would continue to do well going forward too. It would be further aided by the new hospitals that the company would be adding, he added.


The total income for the company in the third quarter was up at 17.9 percent at Rs 1,680 crore as compared to Rs 1,425 crore. However, the net profit was a down at Rs 72.8 crore versus Rs 122.3 crore for the same quarter last fiscal.


The company also reported an exceptional loss of Rs 25.7 crore in the quarter.


The company operates on two segments; the hospitals and pharmacy. The hospital EBITDA came in at 18 percent and pharmacy was around 4.5 percent but the blended margins were around 12 percent and would continue to remain at a similar number going forward too, said Akhileswaran.


The third quarter has always been a cyclical low for the hospital business but in Q2FY17 we also had a VIP admission, which impacted inflow of other patients plus demonetisation – all this resulted in weak numbers in the quarter. However, going forward things look better for the fourth quarter on back of addition in beds etc.

However, the return on capital trajectory for both business look good and would converge to 17-18 percent RoC.

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