Apollo Hospitals on expansion spree; eyes Mumbai, Bengaluru markets
Akhileswaran said that in the next six to eight quarters, HealthCo would continue to do well and move towards profitability in the online segment
A month after private equity firm Advent International (Advent) and Apollo HealthCo entered into a deal, its parent company Apollo Hospitals Enterprise (AHEL) said on Thursday that it is set to expand its presence in Mumbai and Bengaluru soon.
The hospital chain will start two 500-bed hospitals in Mumbai at an investment of around Rs 2,000 crore and a 400-500 bed hospital in Bengaluru. Advent and Apollo HealthCo entered into a deal through which Advent will invest Rs 2,475 crore into Apollo HealthCo, a wholly-owned subsidiary of AHEL. The Rs 890 crore that AHEL received from the deal will be used for organic and inorganic expansion.
The Mumbai and Bengaluru plan is part of the long-term strategy by the hospital chain operator to invest around Rs 3,000 crore over a period of three years to add another 2,400 beds.
“In all urban locations, we are looking at 400 to 500-bed facilities. The investment in Mumbai will be around Rs 2 crore per bed, and we will be coming up with two 500-bed hospitals in Mumbai,” said Krishnan Akhileswaran, chief financial officer of the company.
Keimed, a wholesale distribution company owned by the promoters of the Apollo Group, will also get merged into Apollo HealthCo. “The merger is going to take 24 to 30 months. Apollo 24×7 will also become neutral to profitable in the next six to eight quarters. When that happens, HealthCo itself will be a large business. With the addition of Keimed, we are talking about a Rs 25,000 crore business, which should be an integrated pharma distribution company in three years. We have set a path of making it a profitable operation,” Akhileswaran added.
AHEL has posted a 77 per cent rise in consolidated net profit for the fourth quarter of the financial year 2023-24 at Rs 258 crore. It had posted a net profit of Rs 146 crore in the same quarter of the previous financial year. “Overall, the business has done well. Revenue saw a 15 per cent growth. We have achieved almost a 31 per cent growth in Ebitda and a 77 per cent increase in PAT, driven primarily by profitability in HealthCo and AHLL. HealthCo has turned around from losses to an overall profit situation, and the overall profit of AHLL has also improved, while healthcare has continued to maintain its momentum,” he added.
Akhileswaran said that in the next six to eight quarters, HealthCo would continue to do well and move towards profitability in the online segment.
“Going forward, Apollo Hospitals will continue to strengthen its endeavours to identify and introduce best-in-class, technology-enabled healthcare solutions to enhance patient outcomes and improve access to quality care. Together, we embark on a journey towards a healthier, more resilient future, where every individual receives the highest standard of care,” said Prathap C. Reddy, chairman, Apollo Hospitals Group.
First Published: May 31 2024 | 4:09 PM IST