Highlights of the Call:

• Consolidated revenues grew by 22% to Rs 723.4 crore for the quarter ended June 2011. OPM declined by 20 basis points to 16.5% resulting operating profit to incline by 21% to Rs 119.7 crore. Interestingly, The growth aided by continued growth in revenues from the healthcare services mainly led by growth primarily from hospitals in Hyderabad, Bhubaneswar, Karim Nagar, Vizag as well as in key subsidiaries & JVs (Kolkata and Clinics).
• On Consolidated basis, the Average Revenues Per Occupied Bed (ARPOB) is at Rs 20079 for the quarter ended June 2011, as against Rs 20835 in corresponding previous period. Further, the Occupancy is at 73% as against 74% in the corresponding previous period despite increase in beds.
• Its standalone net sales higher by 22% to Rs 641.01 crore for the quarter ended June 2011. Further, Revenues from Healthcare services business higher by 18% to Rs 451.42 crore contributing 70% of total sales.
• The growth in Healthcare Services business driven by robust growth in revenue from Hyderabad cluster by 31% to Rs 85.3 crore for the quarter ended June 2011, on the back of strong volume growth due to the focus COEs (Centre of Excellence) like Cardiology (30%), Neurosciences (26%) and Orthopedics. Also the Average occupancy was at 60% (same level compared to corresponding previous period) despite the addition of new beds (560 beds compared to 482 beds in the corresponding previous period).
• Apollo Hospitals, Secunderabad reported Revenue of Rs. 7.14 crore for the quarter ended June 2011, as against Rs. 1.60 crore in the corresponding previous period. Apollo REACH Hospitals at Karimnagar and Karur also performed well with revenue growth of 16.7% and 60.1% respectively.
• In addition, Chennai cluster revenue grew by 6% to Rs 204.8 crore for the quarter ended June 2011,on the back of 4% growth in inpatient revenues to Rs 159.9 crore. However, the management attributes the slow down to the 6% decline in outpatient volume on the back of business impact due to the recent elections. In addition, some impact due to the seasonality. Further, going forward it expects the normal growth.
• New hospitals (Others) also witnessed strong 27% growth in revenue to Rs 75.9 crore for the quarter ended June 2011, on the back of 67% surge in out patient revenue coupled with 16% growth in inpatient revenue. The new hospital at Bhubaneswar reported revenues of Rs. 10.69 crore against Rs. 5.34 crore in the corresponding previous period. Average occupancy already at 70% on the back of continuous increase in patient admissions. EBITDA margins now at 3% and expected to improve further during the course of the year.
• On overall basis, its focus was on reducing ALOS (Average Length Of Stay), Increasing ARPOB (Average Revenue Per Occupied Bed) through pricing, and case-mix improvement in its mature clusters.
• Standalone Pharmacies delivered strong growth with Revenues growing 36% to Rs. 189.76 crore for the quarter ended June 2011, driven by strong volumes in Existing stores and momentum from new stores. Further, the continued to focus on EBITDA expansion by driving buying efficiencies, operating leverage and closure of loss making stores.
• The Company added 47 gross stores and closed 26 stores resulted net addition of 21 stores during the quarter. Interestingly, It has 1220 stores as on June 30, 2011. The LFL (Like-for-like) Revenue per store growth for the pre FY2007 batch of stores grew by 17% to Rs 0.22 crore.
• The steady improvement in operating metrics was demonstrated by the batch of mature stores (pre March 2007) as it reported an EBITDA margin of 5.14% for the quarter ended June 2011, represents an increase of 50 basis points over the EBITDA margin of 4.62% in corresponding previous period.
• The receivable days for all the Pharmacies are at 8 days for the quarter ended June 2011, as against 6 in the corresponding previous period. In addition, the payable days are at 7 compared to 8 days in the corresponding previous period. Interestingly, the inventory days are at 42-45 days.

• Apollo Health Street revenues grew by 13% to Rs 122.03 crore for the quarter ended June 2011, with an EBITA margin of 15.7% as against 13.7% in the corresponding previous period. However, the company reported loss Rs 4.4 crore as against profit of Rs 2.67 crore in the corresponding previous period on the back of USD 1.3 million as litigation cost.
• Apollo Munich Health Insurance Ltd recorded robust 71% growth in revenues to Rs 71.83 crore for the quarter ended June 2011.However, it reported loss of 9.48 crore at PAT level as against 18.09 crore in the corresponding previous period.
• During the quarter, Hyderguda facility with 150 beds and a first-of-its-kind dedicated state of art 20 bedded day care facility with 24X7 Emergency in Chennai were inaugurated.
• Apollo Hospitals has signed a preliminary Joint venture agreement with the Government of Tanzania to set up a state of the art 250 bed advanced healthcare facility in Dar-es-Salaam.
• On Standalone basis, The RoCE at 17.1% for the period ended June 30^th 2011, as compared to 17.3% in corresponding previous period in spite of additional Rs 357.8 crore capital employed, primarily in Hyderabad, Bhubaneswar, Chennai and Karaikudi.
• It raised Rs. 330 crore through QIP issue of 66,66,666 equity shares at Rs. 495 each comprising a premium of Rs. 490 per share (face value of Rs. 5 per share) in July 2011. These funds will be used primarily for expansion of the hospital network to strengthen and deepen its pan India presence.

• As at June 30, 2011, Apollo has already invested Rs.320.1 crore of the Rs. 1124.8 crore its share of total capex as per its expansion plans by FY'14. For the remaining 800 odd crores, it has already raised Rs 330 crore QIP issue and expected to raise Rs 200 crore through warrants and the remaining will be funded through internal accruals.
• The Company expects margins are going to be sustainable on the back of improvement in the margins in Mature Clusters (Hospitals) and margins improvement from the new hospitals (25% operational now) despite the new additions. Further, it is going to focus on margins from the pharmacies business also.