Preview of Apollo Hospitals' Q2 results: Growing healthcare revenues driven by increased occupancy

 Preview of Apollo Hospitals' Q2 results: Growing healthcare revenues driven by increased occupancy

The increasing occupancy rates are anticipated to continue to benefit Apollo Hospitals Enterprise Ltd., increasing average revenues per operating bed (APROB) and boosting profitability along with greater non-covid revenues. Analysts predict revenue to increase, signaling a return from the industry-wide depressed trend in occupancy witnessed in Q1FY24 in Q1.

Apollo Hospitals' performance has already benefited from the growing occupancy at newly opened facilities, while the company's established hospitals are operating profitably.

As a result of better operational leverage and good seasonality, we anticipate higher profitability," Motial Oswal Finacial Services Ltd. analysts said in their preview report. In 2QFY24, they anticipate that Apollo will generate revenue and net profit increases of 8% and 9%, respectively, year over year. However, because to Apollo 24/7's high operational costs, earnings before interest, tax, depreciation, and amortization (Ebitda) is probably going to decrease 2% year over year. Apollo 24/7 is an online platform that offers a variety of services, including home diagnostic lab testing, online prescriptions, and online medical consultations.

Based on increased occupancy and favorable seasonality, MOFSL analysts project that hospital revenues and EBITDA will increase by 3% and 5% annually to ₹2370 crore and RS 590 crore, respectively. It is anticipated that the opening of new shops and increased sales from existing ones would propel a 13% YoY increase in pharmaceutical sales to ₹1890 Crore.

While Ebitda, at ₹555.7 crore, is predicted to decrease 1.7% annually, the consolidated revenue, at ₹4592.6, is anticipated to increase 8.0%. According to MOFSL, consolidated net profit of ₹222.6 crore is anticipated to increase 9.1% annually.

Marketing expenditures will always have an influence on Consolidated EBITDA.

Healthcare revenue growth is anticipated by Kotak Institutional Equities analysts to be 9% year-over-year and 7% sequential in 2QFY24, after a weak 1QFY24 for the Tamil Nadu cluster, which was driven by sequentially higher occupancies.

Things to be aware of: Analysts will, meanwhile, be attentive to updates about the status of the bed addition. Analysts will also be keeping an eye on Healthco's cost-cutting efforts to lower its EBITDA deficit.