Apollo Hospitals trades lower as investors turn cautious ahead of Q3 results

Shares of Apollo Hospitals Enterprise went down in early trade on February 14 as investors exercised caution ahead of the company’s Q3 earnings due later today.

At 10.14am, the stock was quoting at Rs 4,306.65 apiece on the NSE, down 1.19 percent.

Revenue for the healthcare major is likely to grow in mid-teens on a year-on-year basis to Rs 4,177.50 crore, according to a poll of brokerages conducted by Moneycontrol. In the same period a year ago, the company had posted a net profit of Rs 228.4 crore on a topline of Rs 3,638.9 crore.

Better revenue mix, normalisation of medical tourism and rise in pharmacy sales are some factors aiding the topline for Apollo Hospitals.

Meanwhile, high operational expenditure and weak margins are expected to be a drag on the company’s bottomline, Kotak Institutional Equities wrote in a report. Likewise, the poll of brokerages forecasts net profit for the quarter to witness subdued growth at Rs 229.7 crore, up merely 1 percent on year.

“Despite a rise in revenue, the company’s EBIDTA margin is expected to decline on-year due to higher spend on Apollo 24×7,” brokerage firm ICICI Securities wrote in a report.

A poll of brokerages conducted by Moneycontrol pegged the company’s EBIDTA margin for the quarter at 13.1 percent, a contraction of 300 basis points on a year-on-year basis. EBIDTA margin was at 16.1 percent in the corresponding quarter last year.