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Apollo Hospitals (APLH.BO; Rs482.85; 1L)
Takeaways from Mumbai — Apollo hospitals presented at the Citi India Investor
Conference in Mumbai. Below are the key takeaways.
What’s New — The company reiterating its intent to expand aggressively in the
hospitals biz and consolidate its presence in retail pharmacies. Efforts to become
more of a pure hospitals play would continue as it looks for strategic options for the
retail pharmacy and healthcare BPO businesses.
Update on Retail Pharmacy biz — Plans to add at least 200 pharmacies every
year and ramp up to achieve critical mass with improvement in profitability. Scale of
the combined biz (with hospital pharmacies) has helped overall profitability. APLH
has increased its value-added services at the pharmacy level to take advantage of
the reach and will continue to look for a strategic partners/stake sale for the biz.
Update on Hospitals biz — 1) APLH wishes to dominate the markets where they
are present; 2) Add 2,400 bed capacity up to FY14; 3) Opening 3 hospitals in
Mumbai by FY14 with a capacity of 900 beds; 4) Chennai cluster EBITDA margin is
now higher than 30%; and 5) Kolkata hospital EBITDA margin in the range of 20-
25%.
Other Key takeaways — 1) Capex requirement up to FY14 is cRs10bn (includes
Rs1bn of routine capex); 2) Majority of Apollo Clinics are franchised but APLH to
focus on setting up own clinics given the returns; 3) APLH now owns c45% of Apollo
Healthstreet.
Maintain Buy — We remain positive on the healthcare delivery space in India and
maintain our Buy rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Apollo Hospitals (APLH.BO; Rs482.85; 1L)
Takeaways from Mumbai — Apollo hospitals presented at the Citi India Investor
Conference in Mumbai. Below are the key takeaways.
What’s New — The company reiterating its intent to expand aggressively in the
hospitals biz and consolidate its presence in retail pharmacies. Efforts to become
more of a pure hospitals play would continue as it looks for strategic options for the
retail pharmacy and healthcare BPO businesses.
Update on Retail Pharmacy biz — Plans to add at least 200 pharmacies every
year and ramp up to achieve critical mass with improvement in profitability. Scale of
the combined biz (with hospital pharmacies) has helped overall profitability. APLH
has increased its value-added services at the pharmacy level to take advantage of
the reach and will continue to look for a strategic partners/stake sale for the biz.
Update on Hospitals biz — 1) APLH wishes to dominate the markets where they
are present; 2) Add 2,400 bed capacity up to FY14; 3) Opening 3 hospitals in
Mumbai by FY14 with a capacity of 900 beds; 4) Chennai cluster EBITDA margin is
now higher than 30%; and 5) Kolkata hospital EBITDA margin in the range of 20-
25%.
Other Key takeaways — 1) Capex requirement up to FY14 is cRs10bn (includes
Rs1bn of routine capex); 2) Majority of Apollo Clinics are franchised but APLH to
focus on setting up own clinics given the returns; 3) APLH now owns c45% of Apollo
Healthstreet.
Maintain Buy — We remain positive on the healthcare delivery space in India and
maintain our Buy rating on the stock.
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