Apollohosp Ltd — Q2 FY24
Apollo Hospitals reported a robust Q2 FY24 with consolidated revenue of INR 4,847 crore (+14% YoY) and EBITDA of INR 628 crore (+11% YoY).
bullish
high
✓ Verified against BSE filing
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
92%Questions answered0Evaded / deflected12Questions auditedContradictedNumbers vs filing
Answered
High priority
Why is inpatient volume growth muted in core southern markets in Q2?
Asked by Kunal Dhamesha, Macquarie
Management provided a specific reason (delayed monsoon) for muted growth.
Read the exchange
Question
My first question is on inpatient volume growth in our core markets of, Tamil Nadu, AP, and Telangana, which has kind of remained muted for first half in quarter one. We suggested there was some holiday season. But any particular reason why the trend is not picking up in quarter two as well?
Hari Prasad Kovelamudi, President of the Hospitals Division, Apollo Hospitals
Actually, if you're looking at the quarter two, it is a quarter where we have a high volume of medical cases, particularly this, because the monsoon-related cases like dengue and stuff like that, which we had in the last year, second quarter. But I guess because of a delayed monsoon or whatever may be the reason, we did not have that influx of medical cases during the second quarter this year, especially in the southern region.
Answered
High priority
What is driving double-digit ARPOB growth and current payer mix?
Asked by Kunal Dhamesha, Macquarie
Management explained ARPOB drivers and provided payer mix percentages.
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Question
And the second question on the ARPA growth across, when I see across our all the regions, it's in the double digits, in Q2 as well as for H1 also. So is it driven by, decent rate hikes that you would have taken across the network, you know, and if you can also provide the current AMAs. I know Ma'am has said 43% in insurance, but, you know, how would be, self-pay, international, et cetera, also be before?
Krishnan Akhileswaran, Group CFO, Apollo Hospitals
Pricing-wise, we have not taken any price increases in this quarter... We are getting better realizations from insurance.... Payer mix is, you know, there is an 18% growth. ...our insurance revenues have actually grown by 18% in the same year. ...almost 43% rather, and 38% comes from self-pay. International is 20%, and we are now around 7.5% of our revenue is coming from international.
Answered
High priority
Is hospital growth plateauing without expansion?
Asked by Nikhil Mathur, HDFC Mutual Fund
Management denied plateau and gave specific occupancy targets.
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Question
So till the time these expansion activities come on stream, how do you see growth for the hospital business, especially with [ARPO] growth being so strong, the last few quarters, expense also reaching 68%? Does it mean that the growth, without the expansion is kind of coming to a plateau or some sort of stagnation now?
Krishnan Akhileswaran, Group CFO, Apollo Hospitals
No, that's not true. ...we had a 4% volume growth. But even within the volume growth of 4%, if you look at the, mix, we had a 7% growth from surgeries. ...68%, still, you know, there is headroom for growth. We can take it to 70%, 72% next year...
Answered
High priority
Can low double-digit growth be achieved without expansion?
Asked by Nikhil Mathur, HDFC Mutual Fund
Management gave a clear affirmative answer.
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Question
So I don't know if you can give a number or not, but can we expected that even without the expansion plans, a low double-digit kind of growth is achievable, on the base that you are at currently in Q2?
Krishnan Akhileswaran, Group CFO, Apollo Hospitals
Yes.
Partial answer
Medium priority
Why focus expansion on metros rather than non-metros?
Asked by Nikhil Mathur, HDFC Mutual Fund
Management gave a high-level explanation but no specific data on why metros were chosen.
no specific metrics givengeneric rationale
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Question
So given your early mover advantage in the non-metros, shouldn't the focus should be a bit more on expansion in non-metros rather than metros, where already the supply is pretty strong over the next three, four years, which is coming on stream?
Suneeta Reddy, Managing Director, Apollo Hospitals
Well, I think we have a very calibrated expansion plan. And the cities that we have selected, it's actually the one-year strategic study, where we looked at one, the size of the market, the ability to pay. Secondly, ability for us in those institutions.
Answered
High priority
What is the pace of store additions and OpEx reduction for pharmacy?
Asked by Neha Manpuria, Bank of America
Management gave store addition plan and specific OpEx reduction numbers.
Read the exchange
Question
So I was wondering on the store addition of, you know, the physical distribution base. ...What is the pace of growth that we should see here? And second, on the 24|7, we've reduced the cost. ...is there scope to materially reduce OpEx...?
Sanjiv Gupta, CFO, Apollo 24|7
Our plan to add about 500+ stores is on. ...we had INR 190 crore of operating expenses... From INR 190 crore, we are down to INR 162 crore, and I strongly believe that, you know, another INR 10 crore-INR 15 crore will further come down as we move forward.
Answered
Medium priority
Is the Rourkela tie-up part of expansion plan?
Asked by Neha Manpuria, Bank of America
Management clearly explained the asset-light model and that it's not part of expansion plan.
Read the exchange
Question
My second question, I also saw we announced, you know, some sort of a tie-up in, you know, Rourkela. Now, is this an existing hospital that we are taking over, and this is not part of our expansion plan?
Krishnan Akhileswaran, Group CFO, Apollo Hospitals
Well, yeah, it's not. We are not investing capital in that asset. Incidentally, it's a fully managed asset-light model that we have. ...it's something that has been developed by Steel Authority of India, and they have, you know, they have given it an operations management contract to us.
Answered
High priority
Why were hospital margins lower and what is the outlook?
Asked by Shyam Srinivasan, Goldman Sachs
Management quantified the margin decline and explained the reasons.
Read the exchange
Question
Just the first one on the hospital margins. I missed the, or I couldn't fully get the opening comments around a higher cost in terms of talent acquisition, and the margins being lower for the hospital. So if you could please elaborate that again?
Suneeta Reddy, Managing Director, Apollo Hospitals
So our margins were at 24.9%. There was 75 basis points decrease because of we have spent on acquisition of doctors, guarantee money for doctors. In fact, we put 100 new doctors into the pipeline, and this has led to an increase in cost, plus the 0.5% increase in marketing cost.
Answered
Medium priority
Why did Karnataka operating beds reduce?
Asked by Bino Pathiparampil, Elara Capital
Management gave specific reasons for bed reduction.
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Question
Karnataka region, I can see a reduction in the number of operating beds. Why has that happened?
Suneeta Reddy, Managing Director, Apollo Hospitals
We're doing some refurbishments in Karnataka and Chennai, so there has been a reduction. And also, the shift, I think earlier we mentioned that, you know, we are replacing some of the general wards with semi-private because of the penetration of insurance...
Partial answer
Medium priority
Why are pharmacy and AHLL margins down YoY?
Asked by Bino Pathiparampil, Elara Capital
Management did not provide a clear YoY margin comparison or quantify the cost impact.
no specific YoY margin comparison givenattributed to costs without quantification
Read the exchange
Question
You commented on the hospital margins. Can I also get some comment on why the pharmacy and the AHLL margins are also down YoY?
Krishnan Akhileswaran, Group CFO, Apollo Hospitals
On the pharmacy, our margins have remained stable in the last two quarters... If you look at it last year, from last year to now, if you look at it, you know, we had increased the costs in the... There were higher costs in the online business, and also, and which is all starting to come off now...
Answered
High priority
What is the EBITDA margin for H1 and revenue for pharmacy?
Asked by Nitin Agarwal, DAM Capital
Management provided specific H1 margin and revenue numbers.
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Question
When we say that INR 10,000 crore of omni channel revenues for specific EBITDA margin, what is the EBITDA margin for H1?
Speaker 18
About H2 is 5.7. H1, H1 is 5.6. We have INR 4,700 crore.
Answered
High priority
What is the EBITDA margin guidance for hospital business?
Asked by Nitin Agarwal, DAM Capital
Management gave a specific target for occupancy and margin improvement.
Read the exchange
Question
And so then one last one, on the hospital business, so what is the guidance for EBITDA that one can look at over a two-year period, or what is the H1 level that we have?
Krishnan Akhileswaran, Group CFO, Apollo Hospitals
Definitely move it above 70, 72 is something that we are working on. ...we should be looking at at least a 200 basis point increase in the overall EBITDA margins.
Quantitative claims vs filed numbers
| Claim | Management said | Filing | Verdict |
|---|---|---|---|
| Hospital margins at 24.9%, down 75 bps due to doctor acquisition costs | 24.9% | 13% | Overstated vs filing |
| Insurance revenues grew 18% YoY, now 43% of revenue | 18% | 14% | Overstated vs filing |
| Pharmacy H1 revenue INR 4,700 crore, EBITDA margin 5.6% | ₹4,700 cr | ₹4,847 cr | Understated vs filing |
| Pharmacy H1 EBITDA margin 5.6% | 5.6% | 13% | Understated vs filing |
| Pharmacy Q2 EBITDA margin 5.7% | 5.7% | 13% | Understated vs filing |
| Pharmacy full year revenue target INR 10,000 crore with 6% EBITDA | ₹10,000 cr | ₹4,847 cr | Overstated vs filing |
| Apollo 24|7 revenue INR 231 crore in Q2 | ₹231 cr | ₹4,847 cr | Understated vs filing |
| Apollo 24|7 EBITDA profit INR 28 crore in Q2 | ₹28 cr | ₹628 cr | Understated vs filing |
Filed figures sourced from Screener.in. Claims within a small tolerance of the filing are marked “matches filing”.