Apollo Hospitals To Focus On Asset Utilisation, Cost Reduction To Boost FY25 Margins

Buoyed by strong Q1 results, Apollo Hospitals Enterprise Ltd. will be targeting better asset utilisation and cost reduction to boost margins in the coming quarters of the current financial year.

Commenting on the June quarter results, Suneeta Reddy, Managing Director of Apollo Hospitals, said the company was looking to widen this margin with Apollo 24/7 and Apollo Health and Lifestyles expected to pick momentum.

"We are looking at better asset utilisation and cost compression to deliver better Ebitda margin. At Apollo 24/7, the possibility is huge. After a quiet quarter with the elections and the heatwave, they are ramping up well so they will be back at 20% growth. At Apollo Health and Lifestyles, we are seeing diagnostics growing fast, along with centres of Apollo Cradle and Apollo Spectra breaking even," she told NDTV Profit.

The hospital chain operator reported a strong performance in Q1 with net profit shooting up by 82% year-on-year to Rs 315 crore against Rs 173 crore in the year-ago period. Its consolidated revenue grew 15% YoY to Rs 5,086 crore compared to Rs 4,418 crore in the June quarter of FY24.

Apollo Hospitals’ Q1 Ebitda stood at Rs 675 crore, with the Ebitda margin improving to 13.3% from 11.5% in the year-ago period.

According to Suneeta, the company was also working to improve its occupancy and take it to 70% by the end of the current financial year, from 68% presently.

“In terms of occupancy, we are 68%, up from 62% last year. There has been a volume growth of 11% that has led to this. At metro hospitals, we are at 70% occupancy and have the operating leverage to improve it in tier 2 as well as in the metro cities and reach a level of 70% within this year,” she said.

On the expansion of its hospital network, Suneeta remained confident they would meet the target of adding 2,300 beds to their network over the next two to three years.

“We have made three acquisitions and have two brownfield projects, so yes, it will be on target. In FY26, you will see two of our assets coming in line. We will see 1,000 beds by then,” she said.