Suneeta Reddy, MD, Apollo Hospitals gives her take on the company’s performance in the December quarter. She says revenues grew 19 percent, while healthcare services clocked 12 percent growth.
Below is the verbatim transcript of Suneeta Reddy's interview with Reema Tendulkar & Nigel D’Souza on CNBC-TV18.
Nigel: Could you take us through the performance this quarter?
A: This quarter revenues grew by 19 percent, healthcare services grew by 12 percent, EBITDA margins grew by 11 percent and our overall profitability grew by 14 percent.
Reema: How is the hospital business performance and if you could also help us with the margins?
A: The hospital business is stabilised in spite of the fact that we have added 900 beds in the past 18 months and that is a huge amount to add. We are currently running with 9,000 beds in the system. This grew by 12 percent out of which 9 percent was pure volumes and the rest was due to case mix. In the hospital business itself, I am happy to state that the EBITDA margin improved by 4 bps but still it grew, its 24.34 percent and the fact that we achieved EBITDA break even in two of our hospitals has been significant.
Nigel: What about the performance of the pharmacy business and could you focus on margins as well?
A: The pharmacy business grew by 30 percent, EBITDA grew by 24 percent, EBITDA margins are at 3.2 percent. The good thing about pharmacy is private label improved from 5 percent to 6.4 percent and there the margins are in the region of 50 percent. So it’s a good story for the pharmacy and bodes well for the growth of pharmacy business
Reema: How has Hetero done and when you consolidate it into your numbers?
A: We have just taken over the Hetero business and it will be some time before we start consolidating the full performance of Hetero into our existing pharmacy business.
Nigel: What is the capex plan going ahead?
A: The capex mostly revolves around the two acquisitions that we have made which is Hetero and Nova which is Rs 140 crore and Rs 125 crore. In addition to that there is existing capex where we added -- in the past we have added 900 beds and we are planning on an additional 1,200 beds in the next 20 months. So we are looking at additional Rs 500 crore in the next one year.
Reema: How will you fund the capex and what is the current debt. Will there be any funding via debt?
A: The current debt levels of the business are at 0.5. We will keep a close watch on both the market and the interest rates before we announce what our funding plan will be, but internal accruals will give us time to plan our capex carefully.
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