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Apollo Hospitals aims to make pharmacy business profitable in a year, CFO says

BENGALURU, Feb 15 – (This Feb. 15 article has been corrected to clarify that the outlook refers to the entire pharmacy business, not the online pharmacy segment, in the headline and in paragraph 1)

India’s Apollo Hospitals Enterprise Ltd ( APLH.NS ) aims to make its pharmacy business profitable by the end of the next financial year, including through cost-cutting, the company’s finance chief told Reuters on Wednesday.

The healthcare group on Tuesday reported a 33% drop in third-quarter net profit, dragged down by losses in its online pharmacy business, which accounts for about 4% of total revenue.

While Apollo’s offline pharmacy, the country’s largest, posted a key profit last quarter, losses in its online business weighed on the combined pharmacy, which accounts for 41% of total revenue.


“We would like to grow in the online pharmacy business as well, so a lot of growth capital is being used for that segment,” Chief Financial Officer Krishnan Akhileswaran said in an interview.

“In our pharma business, we are looking to mitigate overall expenses and see how we can become PAT (profit after tax) positive by the third or fourth quarter of financial year 2024.”

And while the Chennai-based company expects expenses to moderate, its overall expenses, which jumped 22% in the third quarter, could continue to grow, Akhileswaran said.

Still, the cost mitigation will boost Apollo’s healthcare EBITDA margin by 200 basis points in the next financial year, the CFO added.


The business, which accounts for nearly 52% of total revenue, reported an EBITDA (earnings before interest, taxes, depreciation and amortization) margin of 24.7% in the latest quarter.

Shares of Apollo closed 5.1% higher at 4,487.90 rupees on Wednesday, their biggest one-day gain in nearly five months.

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