Apollohosp vs Sbilife Q1 FY24

Apollo Hospitals reported a solid Q1 FY24 with consolidated revenue of INR 4,418 crore (+16% YoY) and EBITDA of INR 509 crore (+4% YoY). Healthcare services grew 13% YoY, driven by a 6% increase in IP volumes and an 11% ARPOB improvement to INR 57,760. Insurance revenue mix improved to 44% of IP revenues. The pharmacy distribution business grew 24% YoY, while Apollo 24|7 GMV surged 189% YoY to INR 623 crore, with operating losses narrowing to INR 57 crore. Management reiterated guidance for Apollo 24|7 to achieve operational breakeven by Q4 FY24 and for combined pharmacy to reach INR 10,000 crore revenue with 6% EBITDA margins. Key risks include slower-than-expected occupancy ramp-up in new hospitals and margin pressure from investments in clinical talent and marketing.

Guidance read

Apollo 24|7 operational breakeven by Q4 FY24: Management reiterated that Apollo 24|7 is on track to achieve operational breakeven in Q4 FY24, with EBITDA loss narrowing to INR 57 crore in Q1. Combined pharmacy revenue target of INR 10,000 crore with 6% EBITDA margin: Management guided for combined pharmacy (offline + online) to reach INR 10,000 crore revenue and 6% EBITDA margins, with 500-600 new store additions planned for FY24. Occupancy target of 70% without additional CapEx: Management expects to reach 70% occupancy over time without requiring significant capital expenditure, leveraging existing capacity. Discount rationalization to 13-14% range for online pharmacy: Management guided that online pharmacy discounts will remain in the 13-14% range for the rest of FY24, with offline discounts at 12-12.5%.

Risk read

Key risks include Occupancy ramp-up slower than expected — Overall occupancy at 62% remains below the 70% target, with new hospitals at 60% and some regions like Tamil Nadu seeing muted volumes due to seasonal factors.; Margin pressure from new store additions and clinical investments — Combined pharmacy EBITDA margins are under pressure due to 20% of stores yet to reach breakeven, and new hospitals face margin drag from doctor hiring and marketing costs.; Apollo 24|7 GMV growth may be impacted by discount reduction — The decision to reduce discounts and filter low-value orders led to a sequential decline in pharmacy GMV, and achieving the INR 3,000 crore GMV target may be challenging.; Indraprastha Medical lease renewal uncertainty — Management deferred providing an update on the lease renewal for Indraprastha Medical, which could impact future operations and expansion plans..

Promise ledger

Scorecard data is being built as historical quarters are processed.

SBI Life reported a decent Q1 FY24 on a high base, with individual new business premium growing 18% YoY to INR 40.6 billion and PAT up 45% YoY to INR 3.8 billion. Growth was driven by strong annuity (individual annuity up 129%) and ULIP traction, while non-par savings saw a temporary dip due to last year's pent-up demand. VNB margin came in at 28.8%, down from 30.2% in Q1 FY23, primarily due to product mix shift. Management reiterated a 20-25% growth aspiration for FY24 and expects margins to remain range-bound around 28-30%. Key risks include potential upward pressure on distributor commissions following regulatory changes (EOM guidelines) and a slight dip in 13-month persistency to 85.1%.

Guidance read

FY24 growth aspiration of 20-25%: Management expects to deliver better than industry growth, targeting 20-25% growth in individual rated premium for FY24. VNB margin to remain range-bound around 28-30%: Management expects VNB margins to stay in the 28-30% range, with no significant expansion or compression expected. Non-par share expected at 24-25% of business: CFO indicated non-par share should normalize to around 24-25% of business for the full year, similar to FY23.

Risk read

Key risks include Potential margin pressure from increased distributor commissions — Regulatory changes (EOM guidelines) may lead to higher commission payouts, especially to SBI, potentially compressing VNB margins.; Persistency decline in near-term cohorts — 13-month and 25-month persistency dipped slightly, which could impact future renewal premiums and embedded value if not reversed.; High base effect may constrain growth in coming quarters — Last year's exceptional Q1 growth (86% in individual rated) creates a high base; sustaining 20%+ growth for the full year requires strong performance in subsequent quarters..

Promise ledger

Scorecard data is being built as historical quarters are processed.