Hospital stocks in demand; Apollo, Fortis, Max Healthcare hit new highs
Shares of the companies engaged in healthcare services or hospital business were in demand on Tuesday with Apollo Hospitals Enterprises, Fortis Healthcare and Max Healthcare hitting their respective new record highs on the BSE in intra-day trade. In the past one week, these stocks have outperformed the market by surging between 12 per cent and 15 per cent as compared to a 2 per cent rise in the S&P BSE Sensex on the back of a robust performance in the June quarter (Q1FY22).
Among individual stocks, Apollo Hospitals Enterprises hit a new high of Rs 4,612, up 6 per cent in the intra-day trade today, having soared 14 per cent in the past two trading days. In Q1FY22, the company reported a strong 31 per cent quarter on quarter (QoQ) growth in consolidated revenue at Rs 3,760 crore for the quarter ended June 2021 (Q1FY22). On a year-on-year (YoY) basis, consolidated revenues rose 73 per cent from Rs 2,172 crore.
The healthy revenue growth was mainly driven by hospital segment, which grew 26.2 per cent QoQ to Rs 1,941 crore, while revenue from the pharmacy distribution segment grew 35 per cent QoQ to Rs 1,512 crore.
Besides, in Q1FY22, occupancy across the group was at 5,108 beds (67 per cent occupancy) as compared to 2,742 beds (38 per cent occupancy) in Q1FY21. The Q1FY22 occupancy in mature hospitals was at 3,500 beds (64 per cent occupancy). New hospitals had an occupancy of 1,607 beds (73 per cent) occupancy) in Q1FY22, Apollo Hospitals said. The company further said average revenue per occupied bed or ARPOB (excluding vaccination) was at Rs 41,102 compared with Rs 38,065, registering a growth of 8 per cent in Q1FY22 as compared to the previous year.
Meanwhile, shares of Max Healthcare Institute too gained 6 per cent to Rs 341 in the intra-day trade today. For Q1FY22, Max Healthcare reported its highest-ever network operating Ebitda (earnings before interest, taxes, depreciation, and amortization) at Rs 360 crore, a 37 per cent increase QoQ. This is the third consecutive quarter of the highest Ebitda both in absolute and margin terms. Operating Ebitda margin also improved 309 basis points (bps) to 27.2 per cent in Q1FY22, sequentially.
“Margin expansion was driven by high overall occupancy, improvement in direct costs ratios and significant uptake in COVID-19 vaccination in initial 6 weeks post launch on May 1, 2021, which touched a high of around 48,600 vaccinations /day. The significant improvement in Operating Ebitda is also attributed to the gains from augmentation of clinical programs and structural cost savings undertaken in the last two fiscal years,” Max Healthcare said.
Further, shares of Fortis Healthcare were up 3 per cent at Rs 265.75, having rallied 12 per cent in the past two trading days. The company posted a profit after tax (PAT) of Rs 430.6 crore in Q1FY22 as against a loss of Rs 187.9 crore in the corresponding quarter last fiscal, riding on a 132 per cent rise in revenues to Rs 1,410 crore and an exceptional gain. The PAT includes an exceptional gain of Rs 306 crore on remeasurement of the previously held equity interest of SRL in the SRL-DDRC JV at its fair value post acquisition of the balance 50 per cent stake in the said JV in April 2021.
The hospital business revenue soared from Rs 488.4 crore in Q1FY21; a lockdown hit quarter, to Rs 1,006.5 crore in Q1FY22. Margins too improved--from a loss of Rs 85 crore last fiscal, the Ebitda in the hospital business improved to Rs 149.6 crore with resulting Ebitda margin of 14.9 per cent.