Apollo Hospitals to add 1,000 beds; eyes Northeast

Company eyes inorganic growth, especially in North East India

 

Apollo Hospitals Enterprise Ltd (AHEL) is planning to add around 1,000 beds across eight hospitals in 2014-15, as works on them were in progress.

AHEL is planning to invest around Rs 500 crore during the current fiscal, through a mix of debt and internal accruals. It also said it was open to inorganic growth in Northeast India. Announcing its financial results for the quarter ended on March 31, 2014, the company said it added over 300 bed in 2013-2014.

The expansion plan includes the 200-bed hospital at Nellore and the 150-bed hospital in South Chennai. Both these facilities are expected to go on stream during the second quarter of the current fiscal, said Suneeta Reddy, joint managing director of AHEL.

She added the 125-bed hospital at Nasik, 200-bed facility at Mellavaram and a 250-bed facility at Vizag are expected to go on stream in the second half of current fiscal.

The hospital chain is also adding two women and child hospitals in Chennai with 60 beds each, and are expected to go on stream in second and third quarter of the current fiscal. A company source informed last year the company had invested around Rs 500 crore and would be investing similar amounts this year.

Apollo Hospitals has a total capacity of 8,617 beds as on Mar 31, 2014, including 39-owned hospitals.

In April, it acquired a 51 per cent interest in a 125-bed hospital in Indore for Rs 26 crore, as part of expanding its operations. The acquired multi-speciality hospital is expected to undergo a capacity upgradation to 175 beds in the next 12-18 months.

“Going forward, as we add more specialties, we can increase our stake,” said A Krishnan , chief financial officer of Apollo Hospitals, while addressing the Analysts.

“We are also looking at inorganic growth, especially in the Northeast,” he said.

The 140-bed ortho-and-spine specialty hospital at Jayanagar, Bangalore, has achieved the Ebitda breakeven in the last quarter while the 260-bed multi-specialty hospital at Vanagaram is nearing breakeven, said Apollo.

The 200-bed specialty hospital in Trichy was operationalised in the third quarter of the fiscal 2013-14, and is expected to achieve Ebitda breakeven within 12 months from its launch.

Q4 net up 7.7 per cent
Apollo Hospitals posted an increase of 7.7 per cent in net profit at Rs 81.34 crore for the quarter ended March 31, 2014, as against Rs 75.52 crore for the same period of the previous fiscal. Total income of the company reached Rs 998.18 crore for the quarter, compared with Rs 848.29 crore in the corresponding quarter previous year, marking an increase of 17.7 per cent.

Margins witnessed pressure considering investments made in developing the infrastructure and the time taken for the new facilities to generate profits, according to a company source. Higher number of standalone pharmacies also impacted its margins, the source added.