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R e s u l t s i n l i n e ; s t o c k f a i r l y v a l u e d …
Apollo Hospitals’ revenues grew 19.3% YoY to | 699.8 crore (I-direct
estimate: | 688.4 crore) with the hospital and pharmacy segment’s
revenue growing 17% and 25% YoY, respectively. The growth in
revenues was in line with our expectations that mainly came in from the
Hyderabad cluster recording strong revenue growth on the back of new
beds added over the last 15 months. Average revenue per bed (ARPOB)
also increased by 12% YoY in H1FY12. This, in turn, helped the company
to maintain its margins at over 17% for this quarter. Interest costs for
the quarter rose sharply by 51% on account of incurring of unrealised
forex translation charge to the tune of | 3.3 crore. As a result, net profit
remained marginally lower than our expectations at | 55.8 crore (I-direct
estimate: | 56.5 crore) despite a better operating performance.
Revenue grows at healthy pace, remains above our expectations
During the quarter, operating revenues registered growth of 19.3% YoY
and 9.2% QoQ, respectively. The growth remained above our estimates
on account of healthy growth in both segments, hospitals as well as
pharmacy. The hospital segment growth mainly came in from the
Hyderabad cluster on the back of new beds added over the last 15
months and a 12% YoY jump in revenue per bed (ARPOB). However,
average occupancy declined marginally by 200 bps YoY to 72%. The
pharmacy segment (that accounts for nearly 30% of topline) registered
strong topline growth of over 25.4% due to 13% increase in number of
outlets and 12.4% YoY jump in revenue per store for the quarter.
V a l u a t i o n s
The company has consistently maintained its growth trajectory while
strong company fundamentals with a healthy sector outlook support our
positive view on the company although likely capex of | 1,646 crore is
expected to impact its return ratios marginally, going ahead. At the CMP
of | 547, the stock is trading at 15.3x and 12.6x its FY12E and FY13E
EV/EBITDA, respectively. We believe it is fairly valued at FY13E earnings
multiple. Hence, we continue to maintain our target price to | 545 (i.e. at
12.5x FY13E EV/EBITDA) with a HOLD rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
R e s u l t s i n l i n e ; s t o c k f a i r l y v a l u e d …
Apollo Hospitals’ revenues grew 19.3% YoY to | 699.8 crore (I-direct
estimate: | 688.4 crore) with the hospital and pharmacy segment’s
revenue growing 17% and 25% YoY, respectively. The growth in
revenues was in line with our expectations that mainly came in from the
Hyderabad cluster recording strong revenue growth on the back of new
beds added over the last 15 months. Average revenue per bed (ARPOB)
also increased by 12% YoY in H1FY12. This, in turn, helped the company
to maintain its margins at over 17% for this quarter. Interest costs for
the quarter rose sharply by 51% on account of incurring of unrealised
forex translation charge to the tune of | 3.3 crore. As a result, net profit
remained marginally lower than our expectations at | 55.8 crore (I-direct
estimate: | 56.5 crore) despite a better operating performance.
Revenue grows at healthy pace, remains above our expectations
During the quarter, operating revenues registered growth of 19.3% YoY
and 9.2% QoQ, respectively. The growth remained above our estimates
on account of healthy growth in both segments, hospitals as well as
pharmacy. The hospital segment growth mainly came in from the
Hyderabad cluster on the back of new beds added over the last 15
months and a 12% YoY jump in revenue per bed (ARPOB). However,
average occupancy declined marginally by 200 bps YoY to 72%. The
pharmacy segment (that accounts for nearly 30% of topline) registered
strong topline growth of over 25.4% due to 13% increase in number of
outlets and 12.4% YoY jump in revenue per store for the quarter.
V a l u a t i o n s
The company has consistently maintained its growth trajectory while
strong company fundamentals with a healthy sector outlook support our
positive view on the company although likely capex of | 1,646 crore is
expected to impact its return ratios marginally, going ahead. At the CMP
of | 547, the stock is trading at 15.3x and 12.6x its FY12E and FY13E
EV/EBITDA, respectively. We believe it is fairly valued at FY13E earnings
multiple. Hence, we continue to maintain our target price to | 545 (i.e. at
12.5x FY13E EV/EBITDA) with a HOLD rating on the stock.
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