Apollo hospitals to invest Rs 1000 crore to facilitate expansion

Chennai: Apollo hospitals is in for another expansion drive with an investment corpus of Rs 1000 crores over the next two years. The investment is geared towards expansion of its healthcare facilities that will add another 1500 beds, taking the overall bed capacity to over 10,500.

For the same, Rs 750 crore is to be raised by this healthcare giant through rights issue.The company also said it is waiting for approval to raise the money. This would help the company overcome its debt level in the coming term.

The hospital, open to inorganic growth is planning to look at asset light models to enter the Middle East and Africa.

Krishnan Akhileswaran, the Chief Financial Officer, Apollo Hospitals Ltd talking to the Business Standard highlighted the past three year achievements of the group saying that eleven hospitals with 1,725 beds had been added by the health group. According to him, these included a hospital each at Malleswaraj, Bangalore and Visakhapatnam, Andhra Pradesh. He also spoke of a Rs 600 cr hospital project to be started in Mumbai in the second quarter with 480 beds.

Speaking about profit performance of the hospital, the financial officer revealed that expenses incurred in the fourth quarter by the healthcare group had lowered net profitability by 2 %, a marginal drop.

"We are happy about EBITDA which grew by 5% yearly. During the fourth quarter we have incurred expenditure which resulted in drop in profit marginally," said Akhileswaran. He was confident of PAT moving up in the coming years as the groups new healthcare additions would start performing. The group plans to stay focused on its new additions in order to have them contribute in a meaningful way to the giant's EBITDA according to Krishnan Akhileswaran. Giving eighteen months to every new unit to start contributing to EBIDTA meaningfully Akhileshwaran also revealed that revenue per bed hadincreased by 10% and the average stay time of a patient in the hospital had decreased to 4.17 as against the earlier 4.5. This he said had happened due to measures of efficiency taken up by the group one of them being the use of robotic procedures. This he felt would ultimately result in widening head room resulting in volume growth..

Akhileswaran estimated an 18 months time span for a new hospital to break-even at the EBITDA level. The company expects hospitals at Tiruchy, Nellore, Nagpur, Perungudi and Nasik end of the fiscal will break-even.

The healthcare group plans to concentrate on bed profitability, enhancement of clinical differentiators and digital foray for consumer outreach. Digital meaning: appointments, consultations and Telemedicine.