In This Article:
Release Date: February 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Apollo Hospitals Enterprise Ltd (BOM:508869) reported a strong performance in Q3 FY25 with all three business segments showing mid-teen revenue growth.
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The company achieved a 13% year-on-year revenue growth in its healthcare services business, driven by favorable trends in centers of excellence, case mix, and pay mix.
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Revenue from cash and insurance patients increased by 15% year-on-year, accounting for 83% of inpatient revenue.
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Apollo Health Co reported its first-ever quarterly profit in Q2 and further strengthened its performance in Q3 with a profit of 32 crores.
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The company is on track to open new facilities in Gurgaon and Hyderabad by the end of FY26, which are expected to achieve break-even quickly due to existing brand presence.
Negative Points
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The company experienced a 1.5% drop in overall revenues due to a decline in footfall from Bangladesh.
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There was a muted trend in the Tamil Nadu and West clusters, with weaker inpatient volume growth attributed to the Bangladesh effect and moderation of CGHS cases.
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The digital business, Apollo 24/7, is still working towards achieving break-even, with a focus on recalibrating its cost structure and growth strategy.
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The company faces challenges in the online pharmacy segment due to high competition and the need for significant investment.
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The expansion of new facilities may lead to a temporary margin suppression, with an expected impact of up to 100 basis points on margins.
Q & A Highlights
Q: Can you provide an update on the Apollo 24/7 platform, particularly regarding the addition of insurance and expected GMV growth? A: We have received necessary approvals for insurance and expect to enable three life and three health insurance companies on our platform by April 1st. While GMV planning is ongoing, we anticipate numbers to build up from April. Our focus is on margin expansion, as insurance offers significant margin potential. (Respondent: Unidentified_6)
Q: What is the outlook for hospital expansion and the commissioning schedule for FY26? A: We plan to open three facilities in the second half of FY26, including Gurgaon and Hyderabad. We expect these facilities to achieve break-even quickly due to our existing presence and brand recognition. (Respondent: Unidentified_3)
Q: Could you elaborate on the Microsoft partnership and its expected benefits? A: The partnership with Microsoft is broader than previous collaborations, aiming to enhance both efficacy and efficiency through AI technologies. We expect improvements in clinical decision support, patient quality, and physician productivity. (Respondent: Unidentified_7)