Apollo Hospitals eyes capex of Rs 500 crore in FY15

Firm plans to develop Bangalore as major cluster for its growth, after Chennai and Hyderabad

Apollo Hospitals is looking at a capex of around Rs 500 crore for FY15, which would be mainly through internal accruals and debt. It has invested around Rs 300 crore in last fiscal year and plans another Rs 450 crore investment this fiscal year for capacity expansion.

The company officials said that it is looking at a capex of around Rs 500 crore in FY15 and the requirement would be met through debt. The company is planning to develop Bangalore as a major cluster for its growth, after developing Chennai and Hyderabad clusters already, added officials in a recent earnings call.

According to the company's earnings call report, around 935 beds across four projects including a 350 bed project in Navi Mumbai are expected to complete in FY 15.

AHEL is currently planning to add 1,000 beds across seven locations during the current fiscal with an investment of around Rs 450 crore and this would be met mostly through internal accruals. Plans are to add 300 beds across three hospitals in Chennai, 180 beds in Malleswaram, Bangalore and 525 beds across three reach hospitals in Nellore, Trichy and Nasik. The company has invested around Rs 300 crore in the last fiscal for expansion, they added.

The hospital chain, as on March 31, 2013, has 51 hospitals with total bed capacity of 8,420 beds including 38 owned hospitals including joint ventures, subsidiaries and associates and 13 managed hospitals.

“Aligned with the Disease burden of the nation, we have built a scientific expansion strategy of  commissioning over 1,000 beds across seven locations in the coming year," said Prathap C Reddy, Chairman of Apollo Hospitals Group while commenting on the performance of the company in the fourth quarter of 2012-13.

He added that the internal resources have also been upgraded to execute on this plan on time and on budget. "This would add to our commendable achievement that we just passed of touching a million patients per Quarter,” he added.

As on March 31, 2013, the company has 6,382 beds in 38 owned hospitals including JVs/ Subsidiaries and associates and 2,038 beds in the 13 managed hospitals. Of the 6,382 owned beds, 5,549 beds were operational and had an occupancy of 72 per cent.

It has commissioned 200 beds multi specialty hospital in Chennai 140 beds Ortho and Spine Specialty hospital in Bangalore in the fourth quarter of the fiscal ended March 31, 2013.

According to reports, brokerage firms J P Morgan and Nomura have downgraded the rating of Apollo Hospitals after it posted an increase of 27.3 per cent in net profit for the fourth quarter of 2012-13, as the growth was supported by exceptional items and tax benefit.