Apollo Hospitals stocks rise 21% above February’s pre-COVID levels

Apollo Hospitals’ cost-savings efforts bear fruit as its stock rises 21 percent above its pre-COVID-19 high observed in February. Despite facing losses in revenue, Apollo Hospitals has done well to report an operating profit due to the massive influx in the patient count during the pandemic.

The hospital segment has been displaying recovery symptoms. Share occupancy levels rallied 56 percent from Q1’s 31 percent during July-September. Most of this was due to the massive influx in the patient count during the pandemic, which contributed about 30 percent to total revenue, supporting operating performance. 

Apollos’ adjusting operating profits reached Rs 230 crores. The bounce in operations as compared to the operating is a factor that investors might be watchful of in the coming quarters. The investors are hopeful of the occupancy reaching 75 percent of pre-COVID-19 levels by the fourth quarter FY20.

Apollo Hospitals’ demerger of its front-end pharmacy business in September has lowered the net debt by Rs 450 crores. Operating profits for this division surged by 22 percent Y-o-Y. Apollo also announced that it will be buying 50 percent balance stake for Rs 410 crore in Gleneagles Hospital.

The stock’s recent jump makes its valuations look rich on its FY22 earnings at about 53 times the earnings.