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Operationally better than estimates

* Apollo Hospitals’ (APHS) 2QFY25 revenues grew 15.3% YoY to INR55.9b (est INR54.0b). Healthcare services’ revenue grew 16.8% YoY to INR25.6b. Healthco’s revenue grew 15.3% YoY to INR20.8b. AHLL’s revenue grew 14.9% YoY to 3.7b

* EBITDA margin expanded 160bp YoY to 14.6% (our est: 14.1%) due to lower employee/other expenses (down 80bp/130bp YoY as a % sales, respectively).

* EBITDA grew 30% YoY to INR8.2b (our est: INR7.6b).

* Adj. PAT grew 63.5% YoY to INR3.8b (our est: INR3.6b).

* Revenue/EBITDA/PAT in 1HFY25 grew 15%/31%/72% to INR106b/INR14.9b/INR6.8b

* Revenue/EBITDA/PAT beat BBG estimates by 9.8%/16.8%/26.1%.

Segmental highlights:

Healthcare services

* Hospital EBITDA grew 14% YoY to INR7.2b for 2QFY25. EBITDA margin stood flat YoY at 24.9% in 2QFY25.

* ARPOB grew by 3% YoY to INR 59,011 in 2QFY25. Effectively, the volume of patients treated grew ~8% YoY for 2QFY25.

* Occupancy for 2QFY25 was 73% vs 68% in 2QFY24.

* ALOS in 2QFY25 stood flat at 3.4 days.

Healthco

* Healthco exhibited EBITDA of INR521m for 2QFY25 vs INR225m in 1QFY25.

* Platform GMV grew 2% YoY to INR7.6b.

* Pharma Average Order Value (AOV) grew 2% YoY to INR979.

* It opened net 154 stores during the quarter, taking the total store count to 6,228.

AHLL

* Revenue/EBITDA grew 14%/30% YoY in 2QFY25 to INR4b/INR414m.

* Revenues of primary care grew 14% YoY in 2QFY25 to INR1.1b.

* Revenues of specialty care grew 17.6% YoY in 2QFY25 to INR1.8b.

* Network collection centers increased by 45 centers YoY to 2,102 centers

Capex Expansion

* APHS plans to add 3,512 beds over four years across 11 locations in India.

* It has entered into a definitive agreement to build and operate a 500-bed hospital in Worli, Mumbai.

* It plans to add 200 beds to its Lucknow facility to a total bed capacity of 500 beds.

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