Healthcare: Resilient Growth in A Seasonally Weak Quarter
Healthcare: Resilient Growth in A Seasonally Weak Quarter
Healthcare: Resilient Growth in A Seasonally Weak Quarter
HEALTHCARE
Resilient growth in a seasonally weak quarter
India Equity Research | Healthcare
We believe APHS is well poised for RoCE improvement as new units begin delivering
higher EBITDA and AHLL business likely to breakeven in FY20. We also like Dr. Lal’s shift
in strategy with aggressive focus on market share gain versus premium pricing earlier. January 07, 2019
Table 1: Edelweiss healthcare coverage universe — Q3FY19 earnings estimates (INR mn)
Net Sales EBITDA EBITDA Margin (%) Reported PAT
Q3FY19E Y-o-Y (%) Q-o-Q (%) Q3FY19E Y-o-Y (%) Q-o-Q (%) Q3FY19E Y-o-Y (%) Q-o-Q (%) Q3FY19E Y-o-Y (%) Q-o-Q (%)
Apollo Hospitals 21,161 14.0 1.2 2,593 17.2 0.6 12.3 33bps -8bps 834 23.7 5.6
Fortis Healthcare 11,729 4.7 2.9 1,277 7.5 (2.6) 10.9 29bps -62bps (653) 245.5 (13.3)
Max India (MHC) 6,600 0.6 (1.5) 647 15.5 1.1 9.8 126bps 25bps 0 39.5 80.8
HCG 2,372 15.0 (3.3) 326 25.2 (2.5) 13.8 112bps 11bps (81) 153.6 5.9
Hospitals 41,863 9.0 1.0 4,843 14.7 (0.4) 11.6 57bps -17bps 101 (80.5) 152.2
Dr. Lal Pathlabs 3,021 15.0 (4.8) 761 34.4 (12.4) 25.2 363bps -216bps 516 43.4 (9.4)
Thyrocare 1,021 21.7 (1.7) 397 12.1 (7.8) 38.9 -333bps -257bps 242 12.9 (2.3)
Diagnostics 4,042 16.6 (4.1) 1,157 25.8 (10.9) 28.6 209bps -218bps 759 32.0 (7.3)
Overall - Healthcare 45,905 9.7 0.5 6,001 16.7 (2.6) 13.1 79bps -42bps 859 (21.3) 10.4
Source: Edelweiss research
10 10
Y-o-Y (%)
140.0 10 12.0
8 8
(%)
7 7
60.0 8.0
4
(20.0) 17 4.0
5 (4) (3) 7 (5) (9) 1
(9)
(100.0) 0.0
Q3FY19E
Q3FY17
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q4FY17
EBITDA growth Revenue growth
64.4 18.0
64
64.0 64 16.0
(%)
(%)
64 64
63.6 63 64 14.0
14 14
63 13 13
63.2 13 13 12.0
12
11
62.8 11 10.0
Q3FY19E
Q3FY17
Q4FY17
Q1FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q2FY18
10 10
9
7 8
8.0 5
1
0.0
(1) (1)
(8.0) (5)
Apollo Fortis Max India HCG Dr. Lal Thyrocare Coverage
(%)
(10.0) (5)
(9)(11)
(30.0) (25)
(35)
(50.0)
Apollo Fortis Max India HCG Dr. Lal Thyrocare Coverage
Chart 5: Fortis and HCG have seen highest consensus earnings downgrades in Q3FY19
3.0
(1)
2
0
1
0.0
(5)
(9)
(1)
(1)
(4)
(3.0)
(%)
(5)
(6.0)
(6)
(9.0)
(12.0)
Apollo Fortis Max India HCG Dr. Lal Thyrocare Overall
FY19E FY20E
Fortis 5 Fortis 4
ADITYA
DN: c=IN, o=EDELWEISS SECURITIES
LIMITED, ou=HEAD RESEARCH,
Aditya Narain cn=ADITYA NARAIN,
serialNumber=e0576796072ad1a3266c2
7990f20bf0213f69235fc3f1bcd0fa1c3009
NARAIN
Head of Research 2792c20, postalCode=400005,
2.5.4.20=6b7d777d3c8c77e0e2c454e915
43f9f4d9b8311cf0678cd975097fc645327
aditya.narain@edelweissfin.com 865, st=Maharashtra
Date: 2019.01.07 18:15:44 +05'30'
Recent Research
Date Company Title Price (INR) Recos
Rating Distribution* 161 67 11 240 Buy appreciate more than 15% over a 12-month period
* 1stocks under review
Hold appreciate up to 15% over a 12-month period
> 50bn Between 10bn and 50 bn < 10bn
Reduce depreciate more than 5% over a 12-month period
Market Cap (INR) 156 62 11
All price charts cannot be included given the large of number of companies in our coverage. Specific charts may be available upon request
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