Stock Review: APOLLO HOSPITALS

The company operates India's largest hospital network, with acapacity of 8,500 beds. It is planning to add 2,400 more over the next three years, at a cost of `1,100 crore. Its new hospitals in Hyderabad, driven by higher per bed revenue and occupancy and Ebitda (earnings before interest, taxes, depreciation and amortisation) margins, should help the company grow Ebitda at a higher rate. Among the key challenges will be to turn around its pharmacy business, which is now 30 per cent of revenue. The company's plans to raise resources to fund its expansion are likely to impact its return ratios.