Doubling Down

Apollo Hospitals Founder and Chairman Dr. Prathap C. Reddy likes to call finance head Suneeta Reddy as Apollo's Lakshmi, the Hindu goddess of wealth. Ask Suneeta Reddy, the Managing Director of Apollo Hospitals and one of the four daughters of Dr. Reddy on what has stood out for her over the past one year and she is quick to say: "The definition of business in today's world is not just about margins and profitability but about social and environmental impact. Apollo Hospitals has been able to touch over 120 million lives since its inception 35 years ago."

Analysts say what has stood out about Apollo Hospitals finances and which shows Suneeta Reddys business acumen is the ability to turn around earnings performance on all fronts, which means improving margins not only in the core hospital business but also reducing losses in its subsidiary, Apollo Health & Lifestyle. This is apart from the restructuring of the pharmacy business and, most importantly, reversing the trend of declining margins in the hospital business. From 21.99 per cent in 2014/15, margins fell to 20.3 per cent in 2015/16, 18.5 per cent in 2016/17, 17.42 per cent in 2017/18 but bounced back to 18.3 per cent in 2018/19. Suneeta Reddy says a key reason for declining margins was focus on adding 2,000 beds.

"We have 28 hospitals in Tier-II and Tier-III locations. With this, we have fortified our readiness to achieve Rs 10,000 crore revenue from healthcare services (hospitals and in-hospital pharmacy sales) over the next five years," she says. This is in addition to the target of Rs 10,000 crore revenue from standalone pharmacies over the next five years. The target is Rs 20,000 crore revenue for Apollo Hospitals Enterprise in five years, more than double the Rs 9,617 crore in FY19.