Cipla vs Apollohosp Q4 FY24

Cipla reported Q4 FY24 revenue of INR 6,163 crore, up 10% YoY, with EBITDA margin expanding 95 bps to 21.4%. Full-year revenue hit a record INR 25,455 crore (+14% YoY) and PAT stood at INR 4,106 crore (16% margin). Growth was driven by One India crossing INR 10,000 crore, North America reaching $906 million (+24% YoY), and South Africa leading prescription market share. Key drivers included branded prescription growth (10% YoY), lanreotide market share of 20.8%, and albuterol share rising to 15.5% in April. Management guided FY25 EBITDA margin of 24.5%-25.5% (up to 100 bps expansion) and capex of INR 1,500 crore. Risks include USFDA observations at Patalganga and Kurkumbh facilities, potential disruption from trade generics channel restructuring, and timing uncertainty for Goa plant reinspection and Abraxane launch.

Guidance read

FY25 EBITDA margin guidance of 24.5%-25.5%: Management expects EBITDA margin expansion of up to 100 bps over FY24's 24.5%, driven by cost measures and portfolio mix. Capex of INR 1,500 crore in FY25: Capital investments planned to enhance manufacturing capability and sustainability. North America revenue growth aspiration for FY25: Aim to grow top line YoY, backed by commercial execution of existing portfolio and new launches. Launch of 4 peptide assets in FY25: Targeting to launch four peptide assets during the fiscal year.

Risk read

Key risks include USFDA observations at Patalganga and Kurkumbh facilities — Patalganga received six 483 observations and Kurkumbh one; official classification awaited, potentially delaying product approvals.; Trade generics channel restructuring disruption — Transition to direct stockist model may cause temporary hiccups in Q1 FY25, impacting trade generics growth.; Timing uncertainty for Goa plant reinspection and Abraxane launch — Goa plant reinspection expected around July-August 2024; Abraxane launch depends on inspection outcome and subsequent 90-day process.; Potential pricing pressure in Lanreotide market — As a two-player market, pricing may vary depending on competitor actions, though management aims to grow total value..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.

Apollo Hospitals reported a strong Q4 FY24 with consolidated revenue of INR 4,944 crore (up 15% YoY) and EBITDA of INR 641 crore (up 31% YoY). Healthcare services revenue grew 17% YoY, driven by 6.1% IP volume growth and 12% ARPOB increase to INR 59,523. Occupancy stood at 65%, with metro hospitals above 70%. The company added 150 new doctors, which temporarily impacted healthcare services margins (23.1%), but management expects a 150 bps margin expansion in FY25. Apollo 24/7 achieved positive EBITDA of INR 12 crore, with a target to breakeven in 6-8 quarters. Pharmacy distribution growth was impacted by inventory rationalization. Guidance includes 15%+ healthcare services growth, 50% GMV growth for Apollo 24/7, and 500-550 new pharmacy stores. Risk: New hospital ramp-up and doctor hiring may delay margin recovery.

Guidance read

Healthcare services revenue growth >15% in FY25: Driven by volume growth, network expansion, and better asset utilization. Healthcare services EBITDA margin expansion of 150 bps in FY25: Targeting 25% margin by end of FY25 through cost optimization and surgical volume growth. Apollo 24/7 breakeven in 6-8 quarters: Targeting GMV of INR 1,700 crore per quarter and take rate improvement from 4% to 8%. Add 500-550 new pharmacy stores in FY25: Offline pharmacy network expansion to continue at similar pace as FY24.

Risk read

Key risks include New hospital ramp-up may delay margin recovery — Four new hospitals with 1,500 beds to be operationalized by calendar 2025-26; initial costs could pressure margins.; Doctor hiring costs may not yield immediate volume benefits — 150 new doctors hired in FY24; full revenue contribution expected only by Q2 FY25, posing near-term margin risk.; Inventory rationalization impact on pharmacy distribution — Lower inventory buildup reduced pharmacy distribution sales by ~INR 150 crore in Q4; growth recovery depends on store-level execution.; Competitive pressure in Nashik market — Nashik hospital remains a drag on western region occupancy due to multiple competitors and low-paying patient mix..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.