Improvement in sight for Apollo Hospitals despite disappointing Q3 results

Operating performance and return ratios should improve through FY20

The December quarter (Q3) results of Apollo Hospitals appeared disappointing, as its standalone net profit was lower than estimates, but a deeper look lends optimism.

The company’s standalone revenues were a bit ahead of estimates.

Continued challenges led by the roll-out of the goods and services (GST) and price caps on knee implants and stents took a toll on Apollo’s net profit. Losses at its newly added Navi Mumbai capacities, too, pulled down profits. Thus, the reported net profit of Rs 674 million was 8 per cent lower than Bloomberg consensus estimates of Rs 734 million. Adjusting for pricing control