Hospital News: India’s Apollo Hospitals Q1 Profit Misses Estimates Due to Digital Healthcare Costs, Revenue Rises 16%
Thailand Medical News Team Aug 14, 2023 8 months, 2 weeks, 4 days, 23 hours ago
Hospital News: Apollo Hospitals Enterprise (APLH.NS), one of India's leading healthcare chains, reported a larger-than-expected decline in its first-quarter profit, weighed down by the expenses associated with its ambitious digital healthcare platform. The company's consolidated net profit for the quarter ending June 30 plummeted by 47.5%, landing at 1.67 billion rupees ($20.2 million), a figure significantly below the average analyst estimate of 2.25 billion rupees, according to data from Refinitiv IBES.
The notable year-on-year drop was attributed to the substantial operating costs incurred by Apollo's digital health and pharmacy business, which makes up nearly 41% of the company's total revenue. This segment reported a widened loss of 830 million rupees compared to 460 million rupees in the same period a year ago. The company remains determined to reverse this trend and bring its pharmacy business back to profitability by the close of fiscal year 2024.
Despite the profit setback, Apollo Hospitals experienced growth in its core operations. The revenue from its hospitals, constituting 52% of the total revenue, saw an impressive increase of nearly 14%. Overall revenue from operations rose by over 16% to reach 44.18 billion rupees, showcasing the company's strong market presence in the healthcare sector.
The diagnostics business, however, faced challenges during the quarter, reporting a loss that expanded to 150 million rupees due to the absence of Covid-related revenue. This marked a significant increase from the 60 million rupees loss recorded in the corresponding period last year.
Dr Prathap C Reddy, Chairman of Apollo Hospitals Group, emphasized the role of technology in the future of healthcare, highlighting several AI-powered tools that the company has integrated into its operations. He told
Hospital News reporters form TMN, "With tools like the AI CVD, AI-enabled Apollo ProHealth platform, the Apollo Clinical Intelligence Engine (Apollo CIE), AI-integrated radiology and diagnostics workflow, and the AI-powered smart in-patient room automation system, we are using AI across the healthcare spectrum including prediction, prevention, diagnosis, and personalized management."
Apollo's expansion efforts were also underscored by its physical presence growth. The company added 2,380 operating beds across 14 new hospitals, contributing to a network of 7,798 operating beds as of June 30, 2023. These new facilities displayed a promising utilization rate of 60%, setting the stage for further growth and profitability in the upcoming quarters.
In terms of geographical revenue distribution, the Tamil Nadu cluster reported a 13% increase, while the AP Telangana region and Karnataka region demonstrated growth rates of 12% and 19% respectively. The company's overall commitment to excellence and innovation remained a driving force behind its ability to navigate challenges and seize growth opportunities.
Apollo Hospitals' stock initially experienced a 2.3% drop following the earnings report, but managed to recover slightly, closing with a 0.6% decrease. This follows a trend of increased private healthcare demand in India post-pandemic, which has attracted global investors to
the country's healthcare chains. Apollo's peers, including Max Healthcare Institute and Fortis Healthcare, have also enjoyed a surge in their June-quarter earnings, with a 39% and 9% rise respectively.
As the healthcare industry continues to evolve and adapt to the demands of the modern world, Apollo Hospitals remains at the forefront of technological integration and patient-centric care. With a strong focus on innovation, expansion, and improved patient experiences, the company is poised to make further strides in the coming quarters, propelling India's healthcare landscape into a more proactive, personalized, and accessible era.
Disclaimer: The information provided in this article is based on sources deemed reliable, but there may be discrepancies or inaccuracies due to the dynamic nature of the news. This article does not constitute financial advice, and readers are advised to consult with financial experts before making investment decisions.
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