Healthcare services provider Apollo Hospitals is expected to deliver healthy Q4FY24 results, with earnings lifted by improved performance from its online pharmacy and diagnostics business, Apollo HealthCo, and steady growth in its flagship hospital business. The company is slated to report its January-March quarter results on May 30.
According to a poll of five brokerages collated by Moneycontrol, Apollo Hospitals' Q4 FY24 net profit will likely surge 76 percent year-on-year to Rs 257 crore. In the same quarter last fiscal, Apollo's net profit was at Rs 146 crore.
The same poll predicted revenue for the company to grow 15 percent YoY to Rs 4,927 crore, up from Rs 4,302 crore clocked in the corresponding quarter a year ago. Out of the five brokerages polled, Nomura gave the most bullish estimates for Apollo while Prabhudas Lilladher projected the least growth.
The company's EBITDA margin is also expected to expand over 100 basis points to around early-to-mid teens aided by reduced losses in its HealthCo business.
HealthCo to report growth in mid-teens
The company's online business, Apollo HealthCo, which was a major drag on its earnings in the year ago period due to high losses, is now expected to deliver revenue growth in the mid-teens for Q4FY24.
"We expect HealthCo sales to grow 14 percent on year, driven by growth in pharmacy distribution sales on account of the store expansion as well as traction in 24/7," Kotak Institutional Equities said.
Resultantly, we expect Apollo HealthCo to report a marginal EBITDA of Rs 2 crore, KIE added. The management had guided to achieving breakeven on an EBITDA level for its HealthCo business by Q4FY24, and hence, the segment will remain on the radar to see if it matches the guidance.
Meanwhile, steady occupancy and healthy ARPOBs (Average Revenue Per Occupied Bed), thanks to strong seasonality in the quarter under review, are expected to aid Apollo's hospital business.
Nomura also expects the EBITDA margin for Apollo's hospital business to come at 19.5 percent in Q4, an expansion of 300 basis points YoY, driven by the divestment of loss-making assets in the recent past.
According to Prabhudas Lilladher, the management's commentary on Apollo's hospital segment occupancy will remain a key monitorable for investors.
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