Apollo Hospitals Q4 net profit rises 50.5% to Rs 146 crore, lags estimate

Apollo Hospitals' Q4 net profit lagged the Street's estimates.

Apollo Hospitals Enterprise reported a net profit of Rs 146 crore for the quarter ended March, up 50.5 percent from Rs 97 crore in the same period of the previous year. However, the bottom line fell significantly short of the analyst's estimate of Rs 198 crore.

Growth in the fourth-quarter was be aided by a favourable base, strong seasonality and better occupancy.

Revenue for the quarter increased by 21.3 percent to Rs 4,302.2 crore, which was in line with expectations of Rs 4,302.7 crore. In the corresponding quarter of the previous year, the company's revenue was Rs 3,546.4 crore.

Operational performance still remained under pressure due to investments made towards the company's Apollo Healthco business. As a result, EBITDA ( Earnings before interest, taxes, depreciation, and amortization) margin eroded to 11.4 percent as against 13.1 percent in the base quarter.

The company's Digital Health business reported an EBIT (Earnings before interest and taxes) loss of Rs 84.4 crore, higher than the Rs 74.2 crore loss in the previous quarter. In the corresponding quarter last year, the arm's EBIT loss was at Rs 8 crore.

In the previous quarter, Apollo's management had guided that losses in its HealthCo arm had peaked in Q4 and would move towards recovery, with a breakeven expected in the second half of FY24. Since losses for the digital arm widened on quarter in Q4, analysts and investors will be on the watch for the management's  commentary on its digital business and outlook for the hospital segment

The company had also guided that it will fund the losses at Apollo HealthCo from internal accruals over the next six months, which means the margin pressure for the hospital major is likely to sustain on a year-on-year basis in the coming quarters.

Shares of Apollo Hospitals Enterprise also reacted negatively to the news and erased their early gains to settle nearly 1 percent lower at Rs 4,599.15 on the NSE.