Tuesday, November 8, 2011


CRISIL Research has come out with its report on Apollo Hospitals Enterprise . The research firm has maintained the fundamental grade of 5/5 to the company in its November 4, 2011 report.

Apollo Hospitals Enterprise Ltd’s (Apollo’s) Q2FY12 results were in line with CRISIL Research’s expectations. Revenues grew at a healthy 19.3% y-o-y supported by growth in the healthcare services and pharmacy businesses, while earnings registered a strong growth of 25% y-o-y due to lower interest cost (adjusted for foreign exchange gain/loss). We retain our positive stance on the growth prospects of the healthcare services industry and Apollo’s dominant position in the organised healthcare market. Consequently, we maintain our fundamental grade of 5/5.

Q2FY12 result analysis
• Revenues grew 9.2% q-o-q (up 19.3% y-o-y) to Rs 6,998 mn, supported by healthy growth in the healthcare services and pharmacy businesses. While the healthcare services business grew 9.0% q-o-q (up 17.0% y-o-y) to Rs 4,915 mn, the pharmacy business registered a growth of ~10% q-o-q (up 25% y-o-y) to Rs 2,085 mn.

• EBITDA margin improved by ~60 bps q-o-q to 17.1% (increased 10 bps y-o-y) driven by 40 bps improvement in the healthcare services business’ margin and 60 bps q-o-q growth in the pharmacy vertical’s margin.

• Adjusted PAT grew by 15.1% q-o-q (up 24.9% y-o-y) to Rs 590 mn due to revenue growth and improvement in margins. PAT margin grew 44 bps q-o-q (up 38 bps y-o-y) to 8.4%. EPS for Q2FY12 was Rs 4.5 compared to Rs 3.8 in Q2FY11.

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