(MENAFN- Live Mint)

Apollo Hospitals Enterprise Ltd's September-quarter financial performance beat Street expectations, as gains in its specialty care like cardiac, oncology, neurosciences, gastroenterology and orthopaedics (CONGO) outweighed the dip in seasonal infections that reduced hospitalizations.

The hospital chain's consolidated revenue grew 13% year-on-year (y-o-y) to ₹6,304 crore in the three months through September, while net profit rose 26% to ₹477 crore. A Bloomberg poll had pegged revenue at ₹6,296.7 crore and net profit at ₹471.1 crore.

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The healthcare services business gained 9% to ₹3,169 crore.“The numbers are a bit muted on the healthcare services business because if you see last year, same quarter, we had the benefit of seasonal medical admissions aided by rains, dengue etc.," chief financial officer Krishnan Akhileswaran told Mint.

“We did see medical admissions were low for the quarter, but we were able to offset that significantly by some of the high-end cases that we continue to do on the CONGO specialties which grew by 14%," he added. The CONGO segment contributes about 60% to Apollo's overall revenues.

The overall occupancy for its hospitals slipped to 69% in the September quarter, from 73% in the same period a year ago.

Shares of Apollo Hospitals ended little changed on the BSE on Thursday at ₹7,784.20 apiece. The results were announced post market hours.

Akhileswaran said that the firm is focusing on enhancing its overall clinical programmes in these specialties, especially oncology, which has seen a notable growth in the previous quarter.

Its retail healthcare arm Apollo Health and Lifestyle Limited (AHLL) reported a revenue growth of 17% to ₹474 crore, largely driven by diagnostics services. It reported a net loss of ₹6 crore against a loss of ₹5 crore in Q2FY25.

The omnichannel retail pharmacy, Apollo HealthCo, increased its revenue by 17% to ₹2,661 crore. Net profit nearly quadrupled from a year earlier to ₹73 crore.

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The online channel Apollo 24|7 grew 22%, driven by stronger focus on private labels and chronic medicines, Akhileswaran said.“We have also been able to drive in operational efficiencies in that business to ensure that the overall losses have now come down to ₹40 crores cash compared to ₹80 crore last year," he said, adding that the business would break even by Q4FY26 or Q1FY27.

Bed expansion

Apollo has started its planned expansion of 1,600 beds over the next 15-18 months with a ₹3,500 crore capital expenditure. The company has already spent ₹2,000 crore. This is part of a larger expansion plan to add over 3,600 beds at a total cost of ₹8,300 crore over the next five years.

The hospital chain has launched Apollo Athenaa, a dedicated cancer centre for women in Delhi's Defense Colony, and a multi-specialty tertiary care hospital in Pune in the September quarter.

“This fiscal year, we will also have a hospital in Kolkata and a 150-bed hospital in Sarjapur Road in Bengaluru," said chief executive Dr. Madhu Sasidhar.

In the July-September period, the decline in patients from Bangladesh hurt the healthcare services revenue by 1%. Sasidhar said that the hospital chai has solidified its presence in other markets like Africa, and the Middle East including Iraq.

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“We are seeing some of the fastest growing patient volumes from those markets, and we are also looking towards our eastern side including countries as far as Malaysia and Indonesia," he added.

Going forward, the firm will continue to have an“intense focus" on CONGO specialties in several markets.“But that doesn't extend to all markets. Certain markets where we will take a more balanced approach, for example, our Pune hospital, we'll have a much more balanced approach with a broad spectrum of specialties," said Sasidhar.

The hospital chain is banking on its added bed capacity to get to its previously guided mid-teens revenue growth next year onwards.

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