Pharmacy business gives Apollo a booster shot; Q4 net profit up 7%

Higher sales at its pharmacies helped healthcare services provider Apollo Hospitals post a 7 per cent increase in net profit at ₹81.3 crore for the quarter ended March 31 compared with the year-ago period. The company’s revenue during the quarter grew 17.6 per cent to ₹998.2 crore.

The pharmacy division garnered a revenue of ₹364.85 crore, up about 28 per cent year-on-year, while the healthcare services business grew 12.5 per cent to ₹633.4 crore.

Apollo plans to spin off the pharmaceutical retailing division as a separate business, but the board is yet to take a decision, CFO Krishnan Akhileshwaran told

Business Line . The company is looking for private equity investment or a strategic investor.

Annual revenue The company began operations at three hospitals during the last 15 months, adding 500 beds to its national tally of 8,300 beds. Traction at the new hospitals and increasing business from high-end tertiary care such as organ transplants and robotic surgeries boosted the company’s revenue 16.3 per cent during fiscal 2013-14, but the profit after tax increased only 7 per cent.

Commissioning new hospitals results in anticipated initial losses, explained Akhlieshwaran, adding the new hospital begun in Jayanagar, Bangalore, has turned Ebitda positive.

Key metrics have shown improvement – overall Ebitda margins have improved from 2.7 per cent to 3.3 per cent over the year, and the average realisation per operating bed has improved 9 per cent year-on-year to about ₹23,900. During 2014-15, Apollo will add at least 1,000 beds.

It will commission a 125-bed hospital in Nashik, Maharashtra, during the September quarter, and a hospital in Nellore, Andhra Pradesh.

The facility it got on a 29-year lease from Lifeline Hospitals in Chennai will be re-branded and launched this fiscal.

The company’s scrip increased marginally to ₹924.25 on the BSE on Wednesday.