The Healthcare services (68% of sales) witnessed 17% growth during Q1FY13 on the back of 19% surge in the total revenues by Chennai Clusters to Rs 204.8 crore (driven by 13% rise in Outpatient volumes, improvement in case mix and pricing) and 15% rise in the total net revenues by Hyderabad cluster to Rs 85.3 crore (volume growth on focus COEs like Cardiology, Neurosciences, Gastroenterology and Oncology). Also, the total net revenues of other hospitals grew by 30% to 75.8 crore and that of subs/JVs/associates increased by 17.3% to Rs 258.1 crore.

Pharmacy business reported a healthy 31% growth in the overall revenue and the expansion trajectory continued at the EBIDTA level (from Rs 2.26 crore in Q1FY12 to Rs 6.14 crore in Q1FY13) on the back of buying efficiencies and operating leverage. The company added 23 stores and closed 33 stores in Q1FY13 taking the total to 1357 stores by the end of 30 June 2012. The total revenue per store increased by 17% y-o-y to Rs 0.16 crore during the quarter ended June 2012.

The company's expansion plans are on track with a total bed capacity of 3100 beds pan India over the nest three years. The total capex estimated for these expansion is about Rs 1815 crore. Of this Rs 322 crore have already been invested and balance will be funded through a mix of debt and internal accruals.

Commenting on the performance, Dr Prathap C Reddy said, ""Apollo Hospitals has commenced FY13 on a strong note with a robust set of results in Q1. We have had volume growth across all our ‘Centres of Excellence' reaffirming our sharply focused competencies. Combined with our focus on technological excellence and emphasis on patient care the resulting clinical standards continue to be among the best in the world.

He added, "We are heartened by the reaccreditation of our Hospital in Hyderabad by the Joint Commission International as it endorses our adherence to the highest standards of quality. The recognition of our REACH hospitals initiative at the prestigious G20 Summit in Mexico is a matter of great pride and encouragement for us.

Apollo Health Street (AHS) and Apollo Munich Health Insurance

• AHS's total revenues grew by 10% to 134.4 crore for the quarter ended June 2012. Despite the expansion in the EBITDA margins by 560 bps to 15.7%, AHS reported Net Loss of Rs 4.4 crore against Net Profit of Rs 6.0 crore in the corresponding previous quarter.

• Total Revenues of Apollo Munich Health Insurance surged 60% to Rs 108.0 crore during the quarter ended June 2012. However, there was a loss at the EBITDA level at Rs 7.3 crore leading too a PAT loss of Rs 9.5 crore during the quarter ended June 2012 against loss of Rs 2.1 crore in the corresponding previous quarter.

• Apollo Munich Health Insurance achieved a Gross Written Premium of Rs 101.7 crore, reporting a growth of 42% y-o-y in Q1FY13. The claim loss ratio has been sustained at 58% in Q1FY13. The company now has 50 offices across the country and Rs 430 crore Assets under Management.

Standalone Quarterly Performance

During Q1FY13, the Net Sales grew by 21% to Rs 777.39 crore on the back of 17% growth in Healthcare Services (68% of sales) to Rs 529.90 crore and a healthy 31% growth in the Pharmacy business (32% of sales) to Rs 247.66 crore. There was a marginal 30 bps expansion in the margins to 16.8% mainly on the back of 230 bps drop in the consumption cost to 27.9% and 50 bps dip in the other expenses to 13.5%, despite the 100 bps rise in the employee benefits cost to 15.7% as a percentage of sales and net of stock adjustments. As a result, the operating profits grew by 23% to Rs 130.39 crore.

At the PBIT level, the margins from the Healthcare Services grew by mere 20 bps to 19.2% leading to the 19% y-o-y growth in the segment profits to Rs 101.49 crore. The margins from the Pharmacy business also expanded by 140 bps to 1.5% resulting the segment profits to surge to Rs 3.79 crore from Rs 0.29 crore in the corresponding quarter previous year.

Other income reduced by 12% to Rs 4.07 crore leading the PBIDT to improve by 22% to Rs 134.46 crore. However, with the 7% marginal drop in the interest to Rs 13.67 crore and 26% spike in the depreciation to Rs 25.11 crore, the PBT increased by 26% to Rs 95.68 crore. Further, the 530 bps dip in the effective tax rate to 27.1% helped the Net Profits to surge by 36% to Rs 69.74 crore.

Standalone yearly performance

Net sales grew by 20% to Rs 2800.07 crore for the year ended March 2012. Also margins improved by 20% to 16.6% and this led to 23% growth in operating profit to Rs 464.40 crore. After the sharp 58% growth in other income to Rs 27.85 crore, PBIDT grew by 25% to Rs 492.25 crore. With the 15% increase in interest cost to Rs 63.60 crore and 29% increase in depreciation to Rs 91.13 crore, PBT grew by 25% to Rs 337.52 crore. Further, after the fall in effective tax rate by 100 bps to 31.6% net profit grew by 27% to Rs 230.99 crore.

• Apollo Bhubaneshwar reported revenues of Rs 16.9 crore, a growth of 58%, while the Apollo Hospital-Madurai reported 40% growth in the revenues to Rs 16.8 crore y-o-y during the quarter ended June 2012. Apollo REACH Hospitals at Karimnagar and Karaikudi also performed well with revenue growth of 32% and 201%, respectively.
• Total Debt stood at Rs 797.9 crore and the cash and cash equivalents (includes investments in liquid funds) stood at Rs 250.7 crore at the end of 30 June 2012.
• In June 2012, the company has allotted 13,81,619 shares of face value of Rs 5 each to International Finance Corporation, Washington at a price of Rs 302.50 per share (including premium of Rs 297.50 per share) upon conversion of balance FCCB loan amount of USD 7.5 million
• In July 2012, the company allotted 32,76,922 shares at a premium of Rs 467.46 per share to Dr Prathap C Reddy on conversion of share of warrants, as a result, the equity share capital further increased to Rs 69.56 crore.

Valuation

The scrip closed at Rs 614.15 crore, up by 0.26% on BSE India on 11 August 2012.