Apollo Hospitals Enterprise reported a bigger-than-expected third-quarter profit on Thursday, as increased bed occupancy helped offset the impact of losses from its cash-guzzling pharmacy vertical.
Consolidated net profit surged 59% to 2.45 billion rupees ($29.5 million) in the three months ended Dec. 31, beating analysts’ average estimate of 2.40 billion rupees, according to LSEG data. The December quarter is typically a seasonally weak period for hospitals due to the holiday season, when fewer people schedule health-related appointments.
However, a rise in the number of surgical cases in the latter half of 2023 has benefited hospital chains such as Apollo and Max Healthcare, resulting in increases in their third-quarter profits. The reduced duration of patients’ stay also boosted occupancy rate.
Apollo, which runs over 70 hospitals across the country with more than 10,000 beds, said revenue from healthcare services business, its biggest revenue generator, rose 12.5%. This drove its overall revenue up by 14% to 48.51 billion rupees.
However, Apollo Hospitals’ bottom line has been under pressure due to losses in its digital health and pharmacy business, which constitutes nearly 42% of its revenue. The unit continued its streak of posting losses in this quarter as well, marking its sixth straight quarter of loss.
The Chennai-based hospital chain aims to turn this unit, which offers online consultations and operates the “Apollo 24/7” platform, profitable by the end of fiscal 2024 by moderating spending. Apollo’s shares rose 3% to hit the session’s high after the results.