Will show robust growth in FY15: Apollo Hospital

In an interview with CNBC-TV18’s  Ekta Batra, Suneeta Reddy, Joint MD, Apollo Hospitals Enterprise Ltd shared her views on the company’s financial performance and the road ahead.Below is the verbatim transcript of the interview on CNBC-TV18:Q: Can you just take us through the how the hospitals did and which were the clusters which performed well this quarter?A: The hospitals did pretty well. They grew by 13 percent and in this the cluster that did exceptionally well was Hyderabad. The new hospitals did not live up to what we expected, there was a loss of Rs 5 crore, but in spite of that there was the healthy growth of 13 percent in the hospital business, 23 percent in the pharmacy business. Overall, our revenues grew at 16 percent and our EBITDA grew by 9 percent.Q: Could you just take us through what the new hospital businesses are looking like, for example Chennai and Hyderabad in particular or Chennai and Bangalore in particular?A: I think there was just a 30.3 percent drop in EBITDA margins and this is because of the fixed costs that the new hospitals contributed which is about Rs 5 crore. Having said that I do have to now state that Jayanagar has been a bit of breakeven since December and by next year the new hospitals in Chennai will be EBITDA breakeven by December. So I do believe that all the new hospitals will be EBITDA breakeven by the end of next year, so we will not see a repeat of this. Q: Your growth was 23 percent. Can you just tell us what your same-store growth was in the pharmacy space?A: Same-store growth was 15 percent and our margins improved from 2.7 percent to 3.2 percent. This is because our private label sales had grown to 6 percent and their contribution to the profit has now increased.Q: Is there any update on how you all would want to monetize your pharmacy business?A: Currently there is no update, but let me tell you that we continue to be in dialogue with various strategic partners.Q: Would we hear anything formidable possibly going into FY15 then on the pharmacy space and would it be more of a strategic partner coming in which would be a global pharmacy player or would it be something from the private equity side?A: I think the global pharmacy player is what we are looking at and I am not too sure that we can fund pharmacy expansion from our own internal accruals. So I do not see a key player entering this space right now unless there is an acquisition strategy in place. For the healthcare segment, certainly next year when the environment around us is stable I believe that we will be in a position to show a healthy pace of growth.