Apollo Hospitals Eyes Strong Q3 Earnings, Sees Recovery from Weak Seasonality
Mumbai: Shares in Apollo Hospitals Enterprises are expected to benefit from strong earnings growth driven by improved occupancy rates, higher average revenue per occupied bed (ARPOBs), and reduced losses in its digital pharmacy business. The healthcare services major is set to release its October-December numbers on February 10, with analysts projecting significant net profit and revenue growth.
According to brokerage polls, Apollo Hospitals' net profit is likely to surge 41.5 percent to Rs 347 crore, up from the Rs 245.30 crore posted in the same period last fiscal. Total revenue is estimated to clock in 15 percent growth to Rs 5,575 crore in Q3 as compared to Rs 4840.60 crore reported in the corresponding quarter last year.
Analysts see improved operational performance thanks to better hospital metrics and reduced losses in Apollo HealthCo's cash-guzzling digital pharmacy business. The company is also expected to expand its ARPOBs, driving margin expansion and revenue growth.
Improved occupancy rates are seen as a key driver forApollo Hospitals' Q3 earnings growth. Analysts at BNP Paribas expect the company's occupancy rate to expand 150 basis points on year, with the management aiming to take occupancy levels to 70 percent for FY25. Higher ARPOBs are also expected to drive margin expansion and revenue growth.
The analysts' expectations highlight a tight range of growth projections, meaning any deviation from these estimates could spark a sharp reaction in the stock.
As Apollo Hospitals releases its Q3 numbers, investors will be watching closely on several aspects such as management's guidance on Q4 occupancy rates and overall FY25 projections. Updates on bed expansion progress and the profitability turnaround of new beds are also being watched with interest.
"It's good news for shareholders," said Raghav Singh, institutional analyst at ICici Securities. "Apollo Hospitals is well-positioned to benefit from improving hospital metrics and reduced losses in its digital pharmacy business."
The company's expected strong earnings growth will be a welcome relief for investors following the challenging period faced by many healthcare stocks due to rising competition and regulatory pressures.
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