{"id":160744,"date":"2024-05-02T08:04:10","date_gmt":"2024-05-02T12:04:10","guid":{"rendered":"https:\/\/44.250.171.167\/?p=160744"},"modified":"2024-05-02T08:04:19","modified_gmt":"2024-05-02T12:04:19","slug":"apollo-hospitals-enterprise-limited-q4-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/apollo-hospitals-enterprise-limited-q4-fy24-earnings-conference-call-insights\/","title":{"rendered":"Apollo Hospitals Enterprise Limited Q4 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Apollo Hospitals Enterprise Limited (APOLLOHOSP) Q4 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Capital Raise<\/strong>\n<ul>\n<li>Apollo HealthCo to raise equity capital of INR 2,475 crores from Advent International.<\/li>\n<li>Advent to hold 12.1% stake in the combined entity post-merger.<\/li>\n<li>Growth capital to accelerate GMV and revenue growth, achieve digital business breakeven.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Keimed Merger <\/strong>\n<ul>\n<li>Apollo HealthCo to integrate 100% of Keimed over 24-30 months.<\/li>\n<li>Keimed valued at INR 8,003 crores (20% discount to peers).<\/li>\n<li>Keimed shareholders to own up to 25.7% in combined entity.<\/li>\n<li>Creates India&#8217;s leading integrated pharmacy distribution business.<\/li>\n<li>Synergies from unified supply chain, enhanced private label sales.<\/li>\n<li>Strengthens Apollo&#8217;s position as leading retail health company.<\/li>\n<li>Currently sourcing 40% of sales from Keimed for Apollo Pharmacy.<\/li>\n<li>Opportunity to increase sourcing up to 98% for pharmacy business.<\/li>\n<li>Keimed to expand SKU range from 45,000 to service more Apollo outlets.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Growth Plans<\/strong>\n<ul>\n<li>AHL to add 2,000 hospital beds with INR 3,000 crore investment.<\/li>\n<li>Leverage Apollo 24\/7 platform to reach more consumers, offer omnichannel care.<\/li>\n<li>Deploy funds from AHL for AHEL&#8217;s business expansion.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Financials<\/strong>\n<ul>\n<li>Combined entity enterprise value of INR 22,481 crores.<\/li>\n<li>AHL valued at INR 14,478 crores (15% premium to peers).<\/li>\n<li>Projected consolidated year 3 revenues of INR 25,000 crores, margins 7-8%.<\/li>\n<li>Offline pharmacies account for bulk of current revenue.<\/li>\n<li>Apollo 24\/7 (digital) contributes 15-16% of revenue.<\/li>\n<li>Commercials between entities for services like consultations, diagnostics to continue.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Deal Approvals<\/strong>\n<ul>\n<li>Two key approvals required &#8211; CCI and shareholders.<\/li>\n<li>CCI approval needed due to Advent&#8217;s entry as new entity.<\/li>\n<li>Company confident of obtaining approvals within stated timelines.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Margins<\/strong>\n<ul>\n<li>Target consolidated margins of 7-8% in 3 years on revenue of INR 25,000 cr.<\/li>\n<li>Current margin at 1.5%, expecting gradual improvement across segments.<\/li>\n<li>HealthCo backend at 7% now, target 9-10% with private label, scale benefits.<\/li>\n<li>Digital business to break even in 6-8 quarters, then add to margins.<\/li>\n<li>Keimed at 3.5% margins currently, expected to improve with scale.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Deal Motivation<\/strong>\n<ul>\n<li>Timely capital raise for Apollo HealthCo&#8217;s growth.<\/li>\n<li>Valued at 15% premium to listed peers based on current performance.<\/li>\n<li>Create unified ecosystem with scale as largest pharmacy company.<\/li>\n<li>Capture higher margins by integrating Keimed&#8217;s sourcing capabilities.<\/li>\n<li>Unlock capital for AHEL&#8217;s own expansion plans.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Growth\/Revenue Projections<\/strong>\n<ul>\n<li>Target 25% revenue growth, a 22% CAGR for combined entity over 3 years.<\/li>\n<li>Front-end stores growing at 25-26% driven by store additions, e-pharmacy.<\/li>\n<li>Keimed grew 12% in 9M, opportunities to accelerate with integration benefits.<\/li>\n<li>Overall 21-22% growth targeted, considered reasonable by management.<\/li>\n<li>INR 25,000 crore revenue target for FY27 is for combined HealthCo entity.<\/li>\n<li>Revenue trajectory expected to see gradual, progressive increase over next 3 years.<\/li>\n<li>No hockey-stick jump anticipated in FY27 revenues.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Private Label<\/strong>\n<ul>\n<li>Limited adoption of Apollo private labels in Keimed&#8217;s 65,000 outlets earlier.<\/li>\n<li>Significant opportunity to push private labels across the expanded network.<\/li>\n<li>Benefits from integrated logistics, supply chain synergies between the entities.<\/li>\n<li>Learnings from Apollo&#8217;s 6,000 outlets to be replicated in Keimed&#8217;s network.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Pharmacy Business Strategy<\/strong>\n<ul>\n<li>Build a unified consumer-centric healthcare ecosystem across verticals.<\/li>\n<li>Organize unstructured pharmacy segment, create pan-India network.<\/li>\n<li>Leverage HealthCo&#8217;s 19,000 pin-code reach as gateway to Apollo&#8217;s services.<\/li>\n<li>Bring convenience to consumers through omni-channel presence.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capital Requirement and Deal Valuation<\/strong>\n<ul>\n<li>Capital raised, $300mn, sufficient for next 5 years&#8217; growth and cash flows to fund future expansion.<\/li>\n<li>Highlighting high capital efficiency with over 18% return on capital employed.<\/li>\n<li>Going forward, working capital-related debt expected for growth.<\/li>\n<li>No major external capital infusion required based on projected cash flows.<\/li>\n<li>Valued at 15% premium to listed peers based on current performance.<\/li>\n<li>Valuation at ~11x forward EBITDA seen as reasonable given timeliness of capital.<\/li>\n<li>Only 1% lower than expected value, outweighed by timely capital infusion.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Growth Capital Usage<\/strong>\n<ul>\n<li>INR 860 cr raised to be used as growth capital for Apollo HealthCo.<\/li>\n<li>Funds for store expansions, working capital requirements to support growth.<\/li>\n<li>Some portion may be utilized for inorganic opportunities like M&amp;A.<\/li>\n<li>Part of capital to go towards debt repayment as well.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Apollo Hospitals Enterprise Limited (APOLLOHOSP) Q4 FY24 Earnings Concall Capital Raise Apollo HealthCo to raise equity capital of INR 2,475 crores from Advent International. Advent to hold 12.1% stake in the combined entity post-merger. Growth capital to accelerate GMV and revenue growth, achieve digital business breakeven. Keimed Merger Apollo HealthCo to integrate [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,5747],"tags":[10169,8160,10310,10320],"class_list":["post-160744","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-healthcare-stocks","tag-earnings","tag-healthcare-services","tag-hospital","tag-pharmacy"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":147986,"url":"https:\/\/alphastreet.com\/india\/apollo-hospitals-enterprise-limited-q4-fy23-earnings-conference-call-insights\/","url_meta":{"origin":160744,"position":0},"title":"Apollo Hospitals Enterprise Limited Q4 FY23 Earnings Conference Call Insights","author":"Praveen","date":"June 1, 2023","format":false,"excerpt":"Key highlights from Apollo Hospitals Enterprise Limited (APOLLOHOSP) Q4 FY23 Earnings Concall Management Update: [00:08:21] APOLLOHOSP said it has made significant progress in inorganic expansion plans, aiming to add 2,000 beds and improve hospital occupancy to 70% by the end of FY '24. Q&A Highlights: [00:12:13] Damayanti Kerai from HSBC\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":133272,"url":"https:\/\/alphastreet.com\/india\/apollo-hospitals-enterprise-limited-q1-fy23-earnings-conference-call-insights\/","url_meta":{"origin":160744,"position":1},"title":"Apollo Hospitals Enterprise Limited Q1 FY23 Earnings Conference Call Insights","author":"Praveen","date":"August 16, 2022","format":false,"excerpt":"https:\/\/youtu.be\/niPJDB-NX_Y Key highlights from Apollo Hospitals Enterprise Limited (APOLLOHOSP) Q1 FY23 Earnings Concall Q&A Highlights: Nitin Gosar from Invesco asked about the increase in operating cost in 24\/7. Sanjiv Gupta CFO Apollo 24\/7 replied that it was due to holding of some expenditure from Q3 to Q1 and Q2. But\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":143152,"url":"https:\/\/alphastreet.com\/india\/apollo-hospitals-enterprise-limited-q3-fy23-earnings-conference-call-insights\/","url_meta":{"origin":160744,"position":2},"title":"Apollo Hospitals Enterprise Limited Q3 FY23 Earnings Conference Call Insights","author":"Praveen","date":"March 3, 2023","format":false,"excerpt":"Key highlights from Apollo Hospitals Enterprise Limited (APOLLOHOSP) Q3 FY23 Earnings Concall Management Update: [00:02:04] APOLLOHOSP said it had a good 3Q23, with healthcare services growing 10% YonY, excluding vaccines, driven by IT volume growth of 7%. Pricing and case mix also contributed to the growth. [00:03:14] APOLLOHOSP saw an\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":133381,"url":"https:\/\/alphastreet.com\/india\/apollo-hospitals-research-report-at-a-glimpse\/","url_meta":{"origin":160744,"position":3},"title":"Apollo Hospitals research report at a glimpse","author":"Chirag Gupta","date":"August 17, 2022","format":false,"excerpt":"Stock Data: TickerAPOLLOHOSPExchangeBSE and NSE\u00a0IndustryHealthcare Why is the stock price rising? Shares of Apollo Hospitals Enterprise Ltd have gained 8.84% over the past month, an indication that the June quarter performance has buoyed investor sentiment. The hospital business grew 26% sequentially and 145% year-on-year (y-o-y), with an improved occupancy level.\u2026","rel":"","context":"In &quot;Analysis&quot;","block_context":{"text":"Analysis","link":"https:\/\/alphastreet.com\/india\/category\/stock-analysis\/"},"img":{"alt_text":"trending stocks high volatility","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2020\/02\/Trending-stocks.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2020\/02\/Trending-stocks.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2020\/02\/Trending-stocks.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":130633,"url":"https:\/\/alphastreet.com\/india\/apollo-hospitals-q4-fy22-earnings-conference-call-insights\/","url_meta":{"origin":160744,"position":4},"title":"Apollo Hospitals Q4 FY22 Earnings Conference Call Insights","author":"Praveen","date":"June 14, 2022","format":false,"excerpt":"https:\/\/youtu.be\/o39b8VAmN3k Key highlights from Apollo Hospitals (APOLLOHOSP) Q4 FY22 Earnings Concall Q&A Highlights: Anubhav Aggarwal from Credit Suisse asked what impacted the pharmacy segment margin that was only 6.1% in 4Q22. Obul Reddy CFO said that there was an increase in the customer discount from 10.5% overall last year to\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":148354,"url":"https:\/\/alphastreet.com\/india\/apollo-hospitals-enterprise-limited-apollohosp-q4-fy23-earnings-concall-transcript\/","url_meta":{"origin":160744,"position":5},"title":"Apollo Hospitals Enterprise Limited (APOLLOHOSP) Q4 FY23 Earnings Concall Transcript","author":"IRS_INDIA","date":"May 31, 2023","format":false,"excerpt":"Apollo Hospitals Enterprise Limited (NSE:APOLLOHOSP) Q4 FY23 Earnings Concall dated May. 31, 2023 Corporate Participants: Mayank Vaswani -- Investor Relations Suneeta Reddy -- Managing Director Shobana Kamineni -- Executive Vice Chairperson Sanjiv Gupta -- Chief Financial Officer, Apollo 24\/7 C. Chandra Sekhar -- Chief Executive Officer, AHLL Obul Reddy --\u2026","rel":"","context":"In &quot;Earnings Call Transcripts&quot;","block_context":{"text":"Earnings Call Transcripts","link":"https:\/\/alphastreet.com\/india\/category\/transcripts\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/Transcript-thumbnail.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/Transcript-thumbnail.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/05\/Transcript-thumbnail.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/160744","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/users\/1767"}],"replies":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/comments?post=160744"}],"version-history":[{"count":0,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/160744\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media\/154818"}],"wp:attachment":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media?parent=160744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/categories?post=160744"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/tags?post=160744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}