Apollo Hospital Q2 Results Review - Capex Outlay Draws Decent Growth Roadmap: ICICI Securities

ICICI Securities Report

Apollo Hospital Enterprise Ltd.’s Q2 FY24 performance was marginally lower than our expectations. Ebitda margin slumped 40 basis points YoY due to contraction in hospital margin (dip of 30 bps YoY) and Apollo Health and Lifestyle Ltd. (dip of 290 bps YoY) while Ebitda losses from pharmacy business were restricted to Rs 387 million as against Rs 436 million in Q2 FY23.

Apollo Hospital's management has retained its growth guidance and has a capex outlay plan of Rs 34.35 billion which will be spent over three years to add a capacity of 2,860 beds.

Discount offered on online 24*7 platform has been curtailed and the division is likely to be Ebitda breakeven by Q4 FY24E. Omni-channel pharmacy business is likely to record revenue of Rs 10 billion with 6% margin in FY24E.

We retain our estimates and maintain 'Hold' rating on the stock; we raise target price to Rs 5,350.

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