Companies
Apollo Hospitals targets ₹25,000 crore revenue in three years by adding beds, improving occupancy: CEO Sasidhar
Summary
- The company says there is significant headroom for growht, in both metro cities and tier-two cities, with a focus on the latter.
New Delhi: Apollo Hospitals Enterprise Ltd is focused on increasing revenue by over 30% to ₹25,000 crore in the next three years by expanding in non-metro cities and boosting the occupancy rate at the company level, Dr Madhu Sasidhar, president and chief executive officer, told Mint.
“We will continue to focus on our efficiency and making sure that we have a good quality of revenue, but I think there's still significant headroom to grow, both in metro cities and tier-two cities, with a focus on the latter," said Sasidhar.
As more people take up health insurance across the country, the company says patients are choosing quality hospitals such as Apollo.
“With the flight to quality and the shift to the organised sector, we plan to push our overall occupancy rate to 70% with a focus on the non-metros over the next few years," Sasidhar said.
The company’s healthcare services segment reported an occupancy of 68% during the first quarter of FY25. Of this, the metros have already reached an occupancy level of 70%, while the non-metros linger at the 65% mark.
Also Read: Could Apollo Hospitals’ expansion plan help its stock recover?
Apollo plans to expand by adding more beds, allocating ₹3,400 crore for this investment over the next three years. The company has expansion plans for cities including Gurugram, Hyderabad, Kolkata, Pune and Bengaluru. Apollo had 7,942 beds in Q1, of which 4,535 were in the metros.
The company reported a first-quarter consolidated net profit of ₹305.2 crore on Tuesday, an 83% increase from a year earlier, buoyed by increasing volumes in healthcare services. Revenue from operations rose 15% to ₹5,085.6 crore. The results were in line with Bloomberg analyst estimates.
The company’s shares have gained more than 36% over the past one year.
Volume growth
The group’s hospitals reported an inpatient volume increase of 11% and a 13% rise in new outpatient registrations. Apollo operates in three categories – healthcare services, diagnostics and retail health, and digital health and pharmacy distribution.
“Our growth has been across every region we serve and has been truly driven by volume. And we have seen that volume increase across all specialities. So, that is why we feel this volume growth is good, healthy and sustainable," Sasidhar added.
Earnings before interest, tax, depreciation, and amortisation, or Ebitda, increased 33% to ₹675 crore with a margin of 13.27%.
“In the first quarter of FY25, we have seen significant growth and improved the reach of our retail operations," Prathap C. Reddy, chairman of Apollo Hospitals Group, said in a statement. “We remain dedicated to advancing healthcare excellence, implementing innovative solutions, and improving access to the best healthcare services throughout India and beyond."
Also Read: Apollo Hospitals needs a heath check on e-pharma, diagnostics
The healthcare services segment reported a 15% rise in revenue to ₹2,637.3 crore during the quarter and a 24% increase in net income to ₹328 crore.
Apollo Health and Lifestyle Ltd, which offers primary care, diagnostics and speciality care, reported a loss of ₹10.2 crore, with revenue rising 15% to ₹366 crore. The HealthCo business of pharmacy distribution and digital health posted a loss of ₹12.9 crore, with overall revenue rising 15% to ₹2,082 crore.
Apollo’s consolidated revenue from operations rose to Rs 19,059 crore in FY24.
