Q3 revenues, which came in at Rs. 2760 crore are not comparable on YoY, QoQ basis due to restructuring of retail pharmacy to pharmacy distribution. Hospital segment grew 16.6% QoQ to Rs. 1443 crore (down 3.4% YoY). AHLL segment revenues are back on the growth track registering 6.4% YoY growth to Rs. 197 crore. Pharmacy distribution segment revenues came in at Rs. 1126. EBITDA margins improved to 14.1% vs. 10.9% in Q2FY21 mainly due to lower staff cost stemming from pharmacy restructuring. Subsequently EBITDA grew 30.2% QoQ to Rs. 390 crore. PAT for the quarter was at Rs. 130 crore, up 41.6% YoY and nearly 4.7x of Q2FY21 net profit.
Valuation & Outlook
While complete business normalisation in the healthcare segment is expected to be more pronounced from H1CY21 onwards, Apollo's management has already charted a way to reduce costs in the short-term. On the other hand, structural cost saving initiatives are also under way to reduce costs by 12-15% in the long-term. We remain positive on the company as besides strong healthcare pedigree and asset base the company owns one of the best pharmacy models in the world that provides an overall cushion in difficult times. We upgrade from HOLD to BUY at a revised TP of Rs. 3170 (earlier Rs. 2310) on SOTP basis by valuing healthcare business (existing hospitals & JV) at 18x FY23E EV/EBITDA, healthcare (new hospitals), pharmacy both at 2x and AHLL at 5x FY23E EV/sales respectively.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_ApolloHospitals_Q3FY21.pdf
Shares of APOLLO HOSPITALS ENTERPRISE LTD. was last trading in BSE at Rs.3091 as compared to the previous close of Rs. 2747.35. The total number of shares traded during the day was 144684 in over 10991 trades.
The stock hit an intraday high of Rs. 3125 and intraday low of 2761.05. The net turnover during the day was Rs. 431290666.