Apollo Hospitals Shares Q3 Results

For the Dec-21 quarter, Apollo Hospitals reported 31.9% higher sales revenues at Rs.3,639 crore on a YoY consolidated basis. Let us look at how the various verticals performed during the quarter. During the December 2021 quarter, revenues from the predominant core healthcare services business saw growth of 40.3% YoY at Rs.2,024 crore. Overall revenues were marginally lower on a sequential basis by just about -2.10%.

Among other verticals, other than core healthcare, the pharmacy distribution vertical saw revenues grow of a healthy 16% YoY at Rs.1,307 crore. In addition, the clinics verticals also grew revenues by a healthy 59% YoY at Rs.313 crore. The retail pharmacy business of Apollo has been transferred to Apollo Pharmacy and hence does not figure among verticals. During Q3, Apollo raised Rs.1,170 crore via QIP placement of 46.6 lakh shares at a price of Rs.2,511.

Let us now turn to the operating performance of Apollo for the third quarter. For the Dec-21 quarter, operating profits increased by 65.14% on a YoY basis Rs.438.03 crore. However, on a sequential basis, the operating profits were lower by -6.85% due to short term cost pressures. In terms of the operating performance, the principal healthcare services vertical saw operating profits increasing by a healthy 102% you at Rs.382 crore.

Among other verticals, the clinics vertical was the surprise package as operating profits grew almost 4-fold at Rs.25 crore, albeit on a smaller base. Pharmacy distribution business saw operating profits fall -55% at Rs.32.10 crore YoY. Cost of materials and consumables were up 35% YoY but largely got offset by inventory efficiency gains. Operating margins in Q3 was up from 9.61% in Dec-20 quarter to 12.04% in the Dec-21 quarter. However, the OPM was 61 bps lower on sequential basis.

Now we look at the bottom line. Net Profits for the Dec-21 quarter were up 75.09% at Rs.228.37 crore in the quarter due to the strong operating performance of Apollo Hospitals getting transmitted to the bottom line. Even the expenses component of Apollo escalated sharply in the quarter . PAT margins were up from 4.73% in the Dec-20 quarter to 6.28% in the Dec-21 quarter. However, PAT margins were lower by 49 bps on sequential basis.