Apollo Hospital eyes to create momentum, facilities by 2013

During the second quarter FY12, Apollo Hospitals' profits have come in at Rs 56 crore as against Rs 49.5 crore in the corresponding quarter last year. The company's income from operations has come in at Rs 700 crore.

Apollo's standalone pharmacy contributes to almost 30% of total revenues and the balance is healthcare services. Joint managing director Sunita Reddy indicated that the central, southern and eastern regions have been growing very fast. However, Apollo expects to create enough momentum and facilities by 2013, which will enable the North to grow much faster. Here is the edited transcript of her interview to CNBC-TV18. Also watch the accompanying video. Q: What is the breakup between your pharmacy and hospital business?
A: The standalone pharmacy contributes to almost 30% of total revenues and the balance is healthcare services. Q: Within the hospital business, which were the clusters that did the best?
A: Hyderabad and Chennai have done very well. We are seeing strong growth coming from our joint venture partners in Kolkata. The central, southern and eastern regions have been growing very fast. We are yet to establish facilities in the West. The North is also growing, but not at the same pace. Q: By when will you be able to pick up the momentum in the North?
A: By the year 2013, we would have created enough momentum and facilities. We would have created critical mass, which will enable us to grow much faster in the North. Q: Your performance of your associate companies like the insurance business, Munich and Health Street. How have they performed in the quarter?
A: Munich has done very well. It has achieved a growth of 77% if you compare it with H1 FY11 last year. The incurred claim ratio has improved to 60% from 67%. Health Street has shown a revenue growth of 10% and has improved its EBITDA margins by 85 basis points to 15.4%. There has been growth in both. Q: What is your expectation for the rest of the year going forward? What kind of expansion plans do you have?
A: In the last 18 months, we added about 850 beds. We hope to add another 150 beds by the end of the year. Out of these 850 beds, only 468 were operational. The balance will slowly become operational by the end of this fiscal. Q: What do you expect in FY13?
A: We will add another 730 beds in FY13 and another 1,350 beds in FY14. The board has also taken a decision to add another 650 beds to 2,200 beds, which will take us to 2,800 new beds by the year 2016. These will be mostly in Chennai and in Patna. Q: Can you guidance on your bottomline and topline for the remaining two quarters?
A: I cannot give you any forward looking statements for the half year. We are able to maintain the growth momentum and strong topline growth, which is consistently growing at about 20%. This is being reflected in the bottomline and I am confident that you will see this in future.