Business Today

Healthy Profits

Reddy has steered Apollo Hospitals through turbulent times.
E. Kumar Sharma   New Delhi     Print Edition: October 8, 2017
Healthy Profits
SUNEETA REDDY Managing Director, Apollo Hospitals Enterprise (Photo: Nilotpal Baruah)

Prathap C. Reddy, the Chairman of Apollo Hospitals, refers to Suneeta, the second of his four daughters who keeps a tight grip on group finances, as Lakshmi, the goddess of wealth, for the group. So it was not surprising when her name figured in this year's Most Powerful Women in Business, a year which was highly challenging for the company on every parameter.

Not to be carried away by her father's analogy, Suneeta - who was also present at the interview a few years ago when Reddy had made the comparison - broke into a smile and said, "Sometimes, just maintaining stability is important, which is why perhaps Goddess Lakshmi sits on a lotus in murky water. To me, this ability to stay afloat and keep your balance is important. I think I managed to achieve that."

Apollo Hospitals' financials have been under pressure for the last couple of years. Its profit after tax, or PAT, fell from Rs 207.99 crore in the year ended March 2016 and Rs 325.41 crore in the year before that to Rs 88.73 crore in 2016/17. The profit margins are also sharply down, from 6.28 per cent in 2014/15 to 1.22 per cent in 2016/17. The growing competition in the Indian health care sector is beginning to bite, it seems.

But this does not seem to disturb her a great deal. "I would be worried if I did not understand what the business is capable of. Competition is coming in at a much higher cost per bed. Sure, EBITDA margins are under pressure for all players and will not go away when you have built capacity. There will be erosion of margins and RoC (return on capital) will drop but we believe this is an 18-month cycle. Our focus is on filling beds and onboarding doctors." Her role, she says, "is to ensure continuous improvement in RoC and growth for the future. I think we are a great growth story for the next two decades and more considering our integrated health care delivery and the capacities we have created."

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