Apollo Hospitals · PDF filepresentation is not intended to be a prospectus (as defined under the Companies Act, 1956) ... 7% 37% Cardiology Oncology Neurology Orthopaedic Transplants

11/23/2016 1www.apollohospitals.com

Apollo Hospitals

INVESTOR PRESENTATION

Sep 2016Strictly private and Confidential


Disclaimer

2

This presentation has been prepared by Apollo Hospitals Enterprise Limited (“AHEL” or the “Company”) solely for your information and for your use and may not betaken away, distributed, reproduced, or redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organization or firm) orpublished in whole or in part, for any purpose by recipients directly or indirectly to any other person. By accessing this presentation, you are agreeing to be bound bythe trailing restrictions and to maintain absolute confidentiality regarding the information disclosed in these materials.

This presentation does not constitute an offer or invitation to purchase or subscribe for any securities of the Company by any person in any jurisdiction, includingIndia and the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment topurchase or subscribe for any securities. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Thispresentation is not intended to be a prospectus (as defined under the Companies Act, 1956) or offer document under the Securities and Exchange Board of India(Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended.

No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of theinformation or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certainstatements made in this presentation may not be based on historical information or facts and may be “forward looking statements” based on the currently heldbeliefs and assumptions of the management of the Company, which are expressed in good faith and in their opinion reasonable, including those relating to theCompany’s general business plans and strategy, its future financial condition and growth prospects and future developments in its industry and its competitive andregulatory environment.

This presentation may contain statements that constitute forward-looking statements. Forward-looking statements involve known and unknown risks, uncertaintiesand other factors, which may cause the actual results, financial condition, performance or achievements of the Company or industry results to differ materially fromthe results, financial condition, performance or achievements expressed or implied by such forward-looking statements, including future changes or developments inthe Company’s business, its competitive environment and political, economic, legal and social conditions. Further, past performance is not necessarily indicative offuture results. Given these risks, uncertainties and other factors, viewers of this presentation are cautioned not to place undue reliance on these forward-lookingstatements. The Company disclaims any obligation to update these forward-looking statements to reflect future events or developments.

This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particularperson. The Company may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such changeor changes. This presentation may not be copied or disseminated in any manner.


Key Highlights

3

One of the leading private sector healthcare services provider1

Attractive industry opportunity2

Excellence in practice3

Strong operating & financial track record4

Anchored for the future5

Strong management team6

11/23/2016 4www.apollohospitals.com4

One of the leading private sector healthcare services provider1


Business Snapshot (1/2)

Healthcare Services

of ConsolidatedRevenues

60%*


3%Other Businesses

• Shareholding(1): Promoters (34.4%), FIIs & FCBs (58.1%), MF/FI/IC (1.3%), Others (6.2%)• Market capitalization of ` 182,727 mn(2)and Debt to Equity ratio of 0.71x(1)

* Including proforma for Kolkata (50% holding) which is not getting consolidated under Ind AS.

(1) As on 30th Sep 2016.(2) NSE Closing price on 30th Sep 2016Source: Company audited financials and Q2FY17 Earnings Update. # Source: Frost & Sullivan

Outlets 2,430Across 22 states

6 14


37%Standalone Pharmacies

8,380 1,359 9,739 62 8 70

7,600+ 11,300+ 4,300+

• Health Insurance (AHEL stake 10%)• Primary Clinics - 73• Sugar Clinics – 44• Dental Clinics - 73• Birthing centres – “CRADLE” - 10• Day Care Centres – 12• Diagnostics – 148• Dialysis - 6

Financial Year Number ofBeds

Pharmacystores

Revenue(`Mn)

2000 1500 25 2684

2005 4000 170 6621

2010 7984 1049 20265

2016 9554 2326 60856

Operating One of theLargest Hospital Networks in Asia(1)

Largest Pharmacy Chain in India(1)#


Business Snapshot (2/2)

FY16 at Apollo Hospitals*

370,000+

Admissions

3,300,000+

Out-Patients

250,000+

PreventiveHealth Checks

10,000+

Heart Surgeries

5,500+

JointReplacements

14,000

Neuro SurgicalOperations

500

Robotic Surgeries

1,100

Kidney Transplants

400

Liver Transplants

120

Countries MedicalValue Travel

170+

Bone MarrowTransplants

160,000+

RadiotherapySessions

57,000+

ChemotherapySittings

* FY16 info for owned hospitals only. Does not include managed hospitals

23%

8%

11%

11%3%7%

37%

Cardiology

Oncology

Neurology

Orthopaedic

Transplants

Gastroenterology

Others

High-end tertiary care practice contributes to63% of Net revenues#

# FY16 In-patient RevenueSource: Company MIS reports


300 750 1,5003,000 5,376

8,1201,0002,608

1,434

FY90 FY95 FY00 FY05 FY10 FY16

# of Beds: 9,739# of Hospitals: 70

7

Pan India PresenceApollo is the leading player in the Indian hospital segment by geographic presence, business span and breadth of service offerings.

Leading Hospital Players in India


Sterling Hospitals


MAX Healthcare Medanta# of Beds: 1,250# of Hospitals: 1


Narayana Hrudayalaya# of Beds: 7,452

# of Hospitals: 29

Manipal Hospitals

CARE Hospitals# of Beds: 2,078

# of Hospitals: 15

* Fortis Hospitals# of Beds: 5,100

# of Hospitals: 54

Apollo Hospitals

Geog

raph

ic Pr

esen

ce

Business Span and Breadth of Services

Sing

leSt

ate

Sing

leRe

gion

Mul

tiple

Regi

ons

Pan

Indi

a

Source: Company Reports, CRISIL Research #Beds as on 30th Sep 2016* Fortis corporate presentation as of April 2015, publicly available on Fortis Healthcare Ltd.’s website

Narrow Wide

Details of beds under operation #

Category wiseCapacity Operational

No. of HospitalsBeds BedsOwned Hospitals 7,884 6,905 42Managed Hospitals 1,359 1,359 8Day care centres/ CRADLE 496 496 20Grand Total 9,739 8,760 70Cluster wise (owned hospitals)Chennai 1,696 1,531 11Hyderabad 959 839 5Kolkata 650 650 2Delhi 875 715 2Bangalore 627 511 3Ahmedabad 320 319 2Tamilnadu (outside Chennai) 808 590 6Bhubaneswar 290 265 1Other India 1,659 1,485 10Grand Total 7,884 6,905 42Maturity wise (owned hospitals)> 5 years 4,400 4,235 233 - 5 years 953 731 61 - 3 years 1,764 1,303 10< 1 year 767 636 3Grand Total 7,884 6,905 42

Bed Growth

Owned Managed

Owned BedsCAGR (FY05-16) 9.5%

9,5547,984

4,000


Attractive industry opportunity2


58

22 155

31

61

2 7

GovernmentSpending

Out of PocketExpenses

Private PrepaidExpenses

Others

Global India

9

Hugely under-penetrated market with attractive dynamics (1/2)Demand for healthcare services in India is expected to rise owing to favorable demographics. Private sector players are well-positioned to leverage this opportunitygiven low contribution of government spending.

Indian Healthcare Delivery

Source: Frost & Sullivan1 Source: WHO – World Health Statistics 2014

Healthcare Expenditure Composition (%)

Low public spending (31%) andlimited penetration of healthinsurance has led to out-of-pocketexpenditure accounting for ~61%of total healthcare spend

Source: WHO – World Health Statistics 2015

Health Expenditure in India% of GDP vs. other countries

India’s healthcare expenditure as % of GDP was 3.8% (Government spends 1.2%) ascompared to global average of 8.6% (Government spends 5.0%)


Per capita vs. other countries ($)

Per capita healthcare expenditure at $196 is the lowest in the world whencompared to $8,845 in the U.S., $3,235 in the U.K. and $578 in China


Spending driven by out of pocket component

* Estimated to be c.US$55bn1 in FY14 and is estimated to grow to overUS$100bn1 by FY19E largely expected to be driven by in-patient revenues

70%20%

10%Healthcare Delivery

Pharma

Medical Technologies &Others

17.0

11.6 10.9 10.3 9.35.4 3.8 4.0 4.5 3.0

8.6

US France Canada Japan UK China India Malaysia Thailand Indonesia Global

8845

46103632 4213

3235

894 578 630 273 196

US Canada Japan France UK Malaysia China Thailand Indonesia India

*


Hugely under-penetrated market with attractive dynamics (2/2)

10

India lags behind other developed and emerging economies in healthcare infrastructure

Healthcare Infrastructure in India

Healthcare infrastructure gap remains substantial, with only 9 beds per 10,000population, significantly lower than the other countries and the global median of 30beds per 10,000 population


India’s share in global disease burden is 20%, while its share of healthcareinfrastructure is much lower with only 6% of global hospital beds and 8% share ofdoctors and nursing staffs

Source: FICCI and E&Y. Note: Data for India’s share in world health parameters

Comparison of India vs. other countries in Healthcare infrastructure parametersPer 10,000 population China India Indonesia Malaysia Singapore Thailand Australia USA

Health Workforce DensityPhysicians 14.6 6.5 2.0 12.0 19.2 3.0 38.5 24.2Nurses and midwives 15.1 10.0 13.8 32.8 63.9 15.2 95.9 98.2Dental 0.4 0.8 0.4 1.4 3.3 0.7 6.9 16.3

Investment required to meet demand supply gapIn order to meet the global median of 30 beds per 10,000 population, India will need to invest over `14 trillion ($230 bn)Source: CRISIL Research

Beds per 10,000 people


InfrastructureHospital beds 39 9 6 18 27 21 39 30

3930 30 30

239

China UK US Global Brazil India

20%

6% 8% 8% 9%

1%

Disease burden Beds Doctors Nurses Community &Health Workers

Lab Technicians


81%83%19%

17%

2014-15 2019-20P

In-patient market size Out-patient market size

201118

29

509

27479

1030

519

163

Cardiac Oncology Diabetes

2008

2013P

2018P

11

Rapid demand growth driven by ….. (1/2)Demographic shifts, changing consumption patterns and increasing affordability makes India one of the fastest growing healthcare delivery markets globally.

Growth in Indian healthcare services will be driven by in-patient based facilitiesIndian healthcare services market

In-patient Out-patientCAGR (2015–20) 13% 10%

Increasing in-patient volumes due to non-communicable life style diseases

Market Size Cardiac Oncology DiabetesCAGR (2008-18) 18% 16% 19%No. of hospitalized cases (mn)

In-patient market size (` bn)Source: CRISIL Research

India: Demographic shift (% of population by age group)

Growing working class population between ages 45 and 60from 22% in 2011 to a projected 29% in 2026

` 3800 bn

` 6,850 bn

Source: CRISIL Research

2.9 5.2 8.3 2.0 3.1 4.2 1.2 2.3 3.4


35 29 27 25 23

27 29 28 26 24

20 20 21 22 24

11 14 15 16 167 8 9 11 13

2001 2011E 2016P 2021P 2026P

0-14 yrs 15-29 yrs 30-44 yrs 45-59 yrs 60+ yrs


Rapid demand growth driven by ….. (2/2)

12

Burgeoning middle class households (in mn)

The number of middle/upper income households is expected to increasefourfold between 2010 and 2020

Source: McKinsey Global Institute

Increasing penetration of health insurance

CAGRFY05–FY14

30%

Higher health insurance penetration allows greateraccess to quality healthcare


Increasing income levels have contributed to a middle class bulge Rising health insurance premium with rising income levels and awareness (` bn)

1.8 3.220.4

107.292.1

5.6 10.9

81.8102.8

61.7

Globals(Upper class)

Strivers(Middle Class)

Seekers(Middle Class)

Aspirers Deprived

2010 2020P

16.7 22.2 32.151.2 66.3 81.1

114.8130.9

154.5174.9

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14


1,70,000 1,90,000 2,30,000 2,70,000 3,00,000 3,50,0004,30,000

2012 2013 2014 2015 2016 2017 2018

2.0 2.4 3.0 3.5 4.2 4.86.0

2012 2013 2014 2015 2016 2017 2018

Medical tourism to reach $ 6 Bn by 2018 from $ 3.5 Bn (1/2)

Source: Ministry of Tourism, Confederation of Indian Industry (CII), RNCOS, News.

The Indian medical tourism industry is expected to reach US$6bnregistering a c.20% CAGR for the period FY12-18

The Indian medical tourism industry is expected to reach US$6bnregistering a c.20% CAGR for the period FY12-18

The total foreign medical tourist arrivals in India is expected to increasealmost 2.5 times from c.0.17mn in 2012 to c.0.4mn in 2018

The total foreign medical tourist arrivals in India is expected to increasealmost 2.5 times from c.0.17mn in 2012 to c.0.4mn in 2018

Growth in medical tourism expected primarily due to (i) qualityinfrastructure (ii) highly skilled doctors; (iii) lower cost of treatment

and (iv) government policies (visas)

Growth in medical tourism expected primarily due to (i) qualityinfrastructure (ii) highly skilled doctors; (iii) lower cost of treatment

and (iv) government policies (visas)

Medical tourist from Asia Pacific region to continue to constitutemajority share. Contribution of MENA and Europe regions is expected

to increase going forward

Medical tourist from Asia Pacific region to continue to constitutemajority share. Contribution of MENA and Europe regions is expected

to increase going forward

Indian Medical Tourism Industry (US$bn) (2012-2018)

Medical Tourists Arrival in India by Region (%)2012 2018E

Asia-Pacific48%

MENA41%

Europe9%

US3%

Asia-Pacific

37%

MENA45%

Europe16%

US1%

11

22

33

44

13

Medical Tourist Arrival in India (2012-2018)


Ailments (US$) US UK Thailand Singapore IndiaHeart Surgery 1,00,000 40,000 14,000 15,000 5,000

Bone Marrow Transplant 2,50,000 2,90,000 62,000 1,50,000 30,000

Liver Transplant 3,00,000 2,00,000 75,000 1,40,000 45,000

Knee Replacement 48,000 50,000 8,000 25,000 6,000

India has the potential to outperform other Asian countries over the next decade driven byincreased focus on quality and outcomes (2/2)Comparison of major medical tourism destinations in Asia

Source: KPMG – FICCI – Medical Value Travel in India (Sep 2014), RNCOS. 1Estimated values for Singapore

Medical tourism is a burgeoning industry in IndiaIndia is competitive in healthcare costs as compared to the developed countries and other nations in Asia. It offers the same standards and quality care at a substantially lower cost.

Cost of key treatment procedures


Size (US $bn (2012) Number of medicaltourists 2012

JCI accreditedhealthcare Facilities

Average saving % ascompared to the U.S. Popular treatment option

Thailand 3,905 2,530,000 37 50 to 75Alternative medicine, cosmetic surgery, dental care, genderrealignment, heart surgery, obesity surgery, oncology and Orthopaedics

India 2,000 170,000 21 65 to 90 Cardiology, Orthopaedics, nephrology, oncology and Neuro surgery

Malaysia 192 671,000 13 65 to 80 Cardiology, oncology, orthopaedic, obstetrics and gynaecology

Singapore1 705 494,000 21 30 to 45 Cardiology, ophthalmology, oncology and anti-ageing

Indonesia NA NA 17 NA Cosmetic surgery and dentistry procedures

Taiwan 313 173,311 13 40 to 55 Orthopaedics, fertility treatment, cardiology and cosmetic surgery

14


Excellence in Practice3

15


Focus on Clinical Excellence and Quality Healthcare Services

• Over 1,60,000+ Cardiac Surgeries• Over 99.6% of cardiac bypass surgeries are Beating Heart

surgeries, ensuring quicker and easier post – operativerecovery.

• Our heart transplant programme is one of the mostsuccessful in the country

• TKR, Illizarov procedure and hip resurfacing — highsuccess rate

• 1st time use of Restorable screws for congenital spineproblems/1st ceramic coated knee replacement inSouth India

• Transsphenoidal surgery for pituitary tumors, spinalfusions, X-Knife for fractioned treatment of benign andmalignant tumours (Stereo Tactic Radiotherapy).

• Ably supported by modern Neuro Radiology services,Neuro-Intensive Care facilities and Medical andRadiation Oncology services

• <10 minutes to pick-up, 200+ Ambulances, 500+ callsdaily, 1,000–1,500 Monthly pick-ups, 2,00,000+emergency footfalls annually, 5,00,000+ calls served in10+ years

• Well-equipped ambulances manned by trainedpersonnel

• Air ambulance services for remote areas and lifethreatening emergencies

• Effective communication system between the centralcontrol room, the ambulances and emergency facilitiesin the hospitals

• 1st in India to introduce Stereotactic Radiotherapy andRadiosurgery for cancer treatment. 1st hospital group inSouth-East Asia to introduce the 16 Slice PET-CT Scan

• Introduced the most advanced CyberKnife® RoboticRadio Surgery System in Asia Pacific region, roboticradiosurgery system designed to treat tumors anywherein the body with sub-millimeter accuracy

• 1st in South East Asia to introduce Proton Beam Therapy(Scheduled in 2018)

• 1400+ solid organ transplants in 2013• Services offered includes Liver & Kidney Transplants,

Corneal Transplants, Heart Transplants, Intestinal & GITransplants & Pediatric Transplants

• Harvested 23 organs from five brain dead donors andconducted ten transplants in a day and gave 23individuals the priceless gift of life

ICU MANAGEMENT

• Our infection control protocols pertain to a widespectrum of interventions & have been developedjointly with intensivists & anesthetists

• Standardised procedure for clinical handover• Bedside Analysis - checklist use has reduced ALOS &

improved infection control indices technology excellence


Technology Excellence

We believe that our investment inthe latest and most advancedmedical technology and equipmenthas enabled us to attractrenowned doctors from India andabroad to practice in our hospitals. Ithas also helped make our hospitalsthe preferred treatment destinationfor patients from various countriesaround the world.


Service Excellence

Service Excellence is the mintmark of Apollomade possible by an engaged workforce thattakes pride in its day-to-day responsibilities.

TASCC (The Apollo Standards of Clinical Care)

Apollo benchmarks itspractices with the besthospitals in the world toensure the highest qualityclinical standards.


Strong Financial & Operating Track Record4


Proven track record of consistent growth and profitabilityConsistent improvement in financial performance across hospitals (mature and new), as well as across businesses (hospitals and standalone pharmacies).

Total consolidated revenue(1) (`mn)

Healthcare Services CAGR (FY08 – 16) 18%Standalone Pharmacies CAGR (FY08 – 16) 36%

EBITDA margin (%) and net profit(2) margin (%)

(1) Revenue is net of doctor fees(2) Net profit after minority interest & associates(3) Source: Company audited financials

1,945 beds added in new facilities over the last 36 months. Contribution toEBITDA yet to be realized

Strong growth in revenue across businesses driven by strong operating performance EBITDA margin and Net Profit margin has consistently improved

Healthcare services• Strong continued revenue growth in mature clusters• New Hospitals – driving substantial revenue growth – through quick ramp up

Standalone Pharmacies:

• Strong Revenue growth aided by LFL growth of over 15% and consistent andcalibrated store additions every year.

• All stores are in the growth phase with relatively mature stores growing at aconsistent rate with increasing EBITDA margins

Healthcare services EBITDA margins of 23.7%(21% including New hospitals initial costs)

Standalone Pharmacies EBITDA margins of 3.6%

10,05812,673

15,19319,081

22,22226,178

29,59433,331

36,736

1,996 3,322 4,817 6,583 8,575 10,98513,616

17,689

23,201

110 147 255 390 678 524 632 765 920

FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16

Healthcare serv SAP Others

15% 14% 15% 16% 16% 16% 15% 14% 13%

6% 6% 7% 7% 7% 8% 7% 7% 5%


EBITDA Margin Net Profit Margin


Steady improvement in ROCE Return on capital employed # healthcare services (%)

FY16, FY15 & FY14 ROCE of Healthcare services excludes new hospitals (Vanagaram, Jayanagar, Trichy, Nashik,Karapakkam, W&C SMR, Nellore, OMR, Vizag new & Malleswaram) added in the last 36 months and AHLL.– Capital employed of ` 12,060 mn in FY16, ` 8,007 mn in FY15, ` 4,357 mn in FY14 and AHLL Capital employed of` 4,366 mn in FY16 , ` 3,004 mn in FY15, ` 1,312 mn in FY14. Contribution to EBIT yet to be realised.ROCE

Efficiency(Asset Turnover)

Efficient use of capital• Lower investment per bed• Strong project execution capabilities• Higher utilization of key facilities & equipments• Quick ramp up of new hospitals—increasing

patient flow & occupancy

ProfitabilityHigher revenue & profitability• Balanced out-patient & in-patient mix• Reduced ALOS• Increasing ARPOB• Improving case mix

Source: Company audited financials

Healthy returns on the capital employed in the business

14%17%

15%19% 18% 19% 20% 20%

18%


* FY 16 ROCE (excluding capital employed of New Hospitals) is at 13%# Excludes CWIP & Investments in liquid mutual funds

Return on capital employed # consolidated (%)

9% 10% 10%

13% 13% 14% 14%12%

10%


*


14,356 15,184 16,620 18,474 20,455 21,724 23,684 25,381 28,036

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

22

Healthcare services: strong operating metrics

In-patient admissions (` 000) Bed occupancy rate(1) %

3,613 3,930 4,257 4,767(2) 5,153(2) 5,549(2) 5,811(2) 6,321 6,724

Average revenue per occupied bed(4)

ARPOB (`/day)Average length of stay (days)(3)

Note: All operating data for owned hospitals.(1) Bed Occupancy Rate: Total Occupied Bed Days/Total Operating Bed

Days. Represents % of available hospital beds occupied by patients.(2) Excludes our hospitals located outside India.

(3) ALOS represents average number of days patients stay in our hospitals.(4) ARPOB (Net of doctor fees): Total Hospital Revenue/Patient Days (Total

Occupancy in Numbers (Average Daily Census) x No of days).Source: Company MIS reports

Operational highlights

Operating BedsOccupancy rates remain high despite bedadditions• Growth of in-patient volumes in line

with addition of beds• New hospitals are ramping up quickly

Average length of stay (ALOS) hasreduced across the portfolio• Reduced in mature hospitals due to

advancement in treatments• Increase in minimally – invasive

procedures

Average revenue per occupied bed(ARPOB) has grown at a healthy CAGR of8.7% over the last 8 years• Culmination of high occupancy, higher

realizations, better case mix &decreasing ALOS

190 211 235 265 281 313 332 354 374


5.18 5.15 4.84 4.79 4.78 4.65 4.54 4.43 4.17


75% 76% 73% 73% 71% 72% 71% 68% 63%



617883 1049 1199 1364 1503 1632

1822

2326


23

Standalone pharmacies: capturing the growth potentialIndia’s largest organized pharmacy retail chain with a network of 2,430 stores.

Number of standalone pharmaciesCalibrated rollout CAGR (FY08-16) 18%

Financial performance – revenue (` mn)Consistent growth CAGR (FY08-16) 36%

Source: Company audited financials and MIS reports

Performance highlights

• Presence in metro centers such as Hyderabad, Chennai, Bengaluru, Pune,Ahmedabad and NCR regions

• Offers a wide range of medicines and surgical products, hospital consumablesand over-the-counter products

• Own brand private labels (FMCG & OTC drugs) constitutes over 6% of FY16turnover. Target to increase to 20% in next 5 years

• EBITDA margin of 3.6% in FY16. Mature stores (pre FY 08 batch) EBITDA marginof 6.8% in FY16

1996 3322 4817 66148606

1101713648

17725

23237



H1 FY 17: Financial performance (1/5)Standalone financials (`mn)

Revenues of ` 30,995 mn, 14.1% yoy growthEBITDA at ` 4,099 mn, 8.9% yoy growth

EBIT at ` 2,938 mn, 5.7% yoy growthPAT at ` 1,642 mn in H1 FY 17

H1 FY 16 H1 FY 17 yoy (%)

Revenue 27,155 30,995 14.1%Operative Expenses 14,000 16,049 14.6%Employee Expenses 3,930 4,464 13.6%Administrative & Other Expenses 5,462 6,384 16.9%Total Expenses 23,392 26,897 15.0%EBITDA(1) 3,763 4,099 8.9%margin (%) 13.9% (1) 13.2% (1) -63 bpsDepreciation 982 1,160 18.2%EBIT 2,781 2,938 5.7%margin (%) 10.2% 9.5% -76 bpsFinancial Expenses 577 913 58.1%Other Income 38 137 258.4%Profit Before Tax 2,242 2,162 -3.5%Profit After Tax 1,771 1,642 -7.3%margin (%) 6.5% 5.3% -122 bps

ROCE (Annualized) 12.4% 11.3%Capital Employed(2) 45,002 52,118

(1) Healthcare services Revenues under Ind AS havebeen grossed up for Fixed fee Doctors &considered separately as operating cost. This wasearlier being netted off from Revenues underIndian GAAP. This results in an opticalcompression of EBITDA margins of Healthcareservices by 130 – 140 bps. SAP Revenues under IndAS has been adjusted for the unredeemed discountpoints in the loyalty program, which impactsEBITDA margins of SAP by 25-30 bps. The impact atthe company level is 70 - 80 bps

(2) Capital employed for the calculation of ROCE doesnot include Capital Work in progress on newhospital expansion projects of ` 7,575 mio forH1FY17 and ` 7,461 mio for H1FY16 &investments in mutual funds and associates.

Note

H1FY17 figures have been presented on the basis of Ind AS. H1FY16 have been restated for comparative purposes as required under the Listing guidelines.


H1 FY 17: Financial performance (2/5)Consolidated financials (` mn)

Revenue growth of 16.2% from ` 30,203 mn in H1 FY 16 to` 35,104 mn in H1 FY 17

Consolidated EBITDA grew by 8.9% from ` 3,662 mn in H1 FY 16 to` 3,989 mn in H1 FY 17

Consolidated PAT at ` 1,141 mn in H1 FY 17

H1FY17 figures have been presented on the basis of Ind AS. H1FY16 have been restated for comparative purposes as required under the Listing guidelines.Previous year figures have been reworked/regrouped/rearranged and reclassified wherever necessary to conform to the requirement of revised Schedule VI format

H1 FY 16 H1 FY 17 yoy (%)

Total Revenues 30,203 35,104 16.2%

EBITDA 3,662 3,989 8.9%

margin(%) 12.1% 11.4% -76 bpsEBIT 2,390 2,488 4.1%margin (%) 7.9% 7.1% -83 bps

Profit After Tax 1,642 1,141 -30.5%

margin (%) 5.4% 3.3% -219 bps

Total Debt 29,935

Cash & Cash equivalents(includes investment in liquid funds) 4,044

Apollo Gleneagles Kolkata which wasbeing pro-rata consolidated to theextent of 50% of our holding onRevenues, EBITDA and PAT underIndian GAAP has not been consolidatedunder Ind AS. JVs are accounted usingEquity method of consolidation underInd ASApollo Gleneagles has Revenues of` 2,260 mio (15% growth) and EBITDAof ` 463 mio (7% growth) in H1 FY 17.

Apollo Health & Lifestyle Ltd, our retailhealth and clinic subsidiary has a 49%subsidiary which has Cradles and shortstay surgery centres (Apollo Spectra)with 51% being held by promoters andother Investors. This has beenconsolidated at 100% on Revenues,EBITDA and PAT using the principle ofManagement control under Ind AS

NoteProforma Consolidated financials(including AGHL, Kolkata) (` mn)

H1 FY 16 H1 FY 17 yoy (%)

Income from Operations 30,203 35,104 16.2%

Add: Share of JVs 986 1,130 14.6%

Total Revenues 31,189 36,234 16.2%

EBITDA 3,878 4,221 8.8%

margin(%) 12.4% 11.6% -79 bpsEBIT 2,542 2,648 4.2%margin (%) 8.2% 7.3% -84 bps

Profit After Tax 1,730 1,236 -28.5%

margin (%) 5.5% 3.4% -213 bps


H1 FY 17: Segment-wise performance (3/5)Standalone financials (`mn)

Healthcareservices

(Existing)

NewHospitals

Healthcareservices(Total)

SAP Standalone

H1 FY 17Revenue 14,866 2,705 17,571 13,424 30,995EBITDAR 3,668 331 3,999 994 4,993margin (%) 24.7% 12.2% 22.8% 7.4% 16.1%EBITDA 3,382 150 3,532 567 4,099margin (%) 22.7% 5.6% 20.1% 4.2% 13.2%EBIT 2,679 -168 2,511 428 2,938margin (%) 18.0% 14.3% 3.2% 9.5%

H1 FY 16Revenue 14,416 1,725 16,141 11,014 27,155EBITDAR 3,679 90 3,769 740 4,509margin (%) 25.5% 5.2% 23.4% 6.7% 16.6%EBITDA 3,424 -39 3,386 377 3,763margin (%) 23.8% 21.0% 3.4% 13.9%EBIT 2,767 -250 2,517 264 2,781margin (%) 19.2% 15.6% 2.4% 10.2%YoY GrowthRevenue 3.1% 56.8% 8.9% 21.9% 14.1%EBITDAR -0.3% 268.0% 6.1% 34.4% 10.7%EBITDA -1.2% 4.3% 50.4% 8.9%EBIT -3.2% -0.2% 62.0% 5.7%

Consolidated financials (`mn)

HealthcareServ Group(Existing)

HealthcareServ Group

(New &Others)

HealthcareServ Group

(Total)SAP AHLL

(incl Cradle) Consolidated

16,991 3,491 20,482 13,424 1,198 35,1044,087 366 4,453 994 -154 5,29424.1% 10.5% 21.7% 7.4% 15.1%3,785 155 3,940 567 -518 3,98922.3% 4.4% 19.2% 4.2% 11.4%2,958 -186 2,772 428 -712 2,48817.4% 13.5% 3.2% 7.1%

16,432 1,887 18,319 11,014 870 30,2034,086 78 4,164 740 -206 4,69724.9% 4.1% 22.7% 6.7% 15.6%3,816 -53 3,763 377 -478 3,66223.2% 20.5% 3.4% 12.1%3,043 -280 2,763 264 -638 2,39018.5% 15.1% 2.4% 7.9%

3.4% 85.0% 11.8% 21.9% 37.6% 16.2%0.0% 372.3% 7.0% 34.4% 12.7%-0.8% 4.7% 50.4% 8.9%-2.8% 0.3% 62.0% 4.1%

H1FY17 figures have been presented on the basis of Ind AS. H1FY16 have been restated for comparative purposes as required under the Listing guidelines.


H1 FY 17: Hospital cluster-wise operational performance (4/5)Apollo has consistently delivered improvement across various operational parameters over the past few years, driving growth even in mature hospitals.

AHEL Standalone

Total(5) Chennai cluster Hyderabad cluster Others(1) Significant subs/JVs/associates(2)

Particulars H1 FY 16 H1 FY 17 yoy (%) H1 FY 16 H1 FY 17 yoy (%) H1 FY 16 H1 FY 17 yoy (%) H1 FY 16 H1 FY 17 yoy (%) H1 FY 16 H1 FY 17 yoy (%)

No. of Operating beds 6,368 6,905 1,505 1,531 930 839 1,814 2,085 2,119 2,450

Inpatient volume 1,86,816 2,05,345 9.9% 44,489 45,962 3.3% 25,695 26,383 2.7% 47,650 53,562 12.4% 68,982 79,438 15.2%

Outpatient volume(3) 6,66,308 7,20,999 8.2% 2,04,653 2,01,137 -1.7% 83,536 84,164 0.8% 1,38,874 1,55,247 11.8% 2,39,245 2,80,451 17.2%

Inpatient ALOS (days) 4.15 4.01 3.93 3.66 4.03 3.80 4.40 4.21 4.17 4.15

Bed Occupancy Rate (%) 67% 65% 63% 60% 61% 65% 63% 59% 74% 74%

Inpatient revenue (`mn) NA NA 5,277 5,616 6.4% 2,281 2,574 12.9% 3,374 3,901 15.6% 7,606 8,392 10.3%

Outpatient revenue (`mn) NA NA 1,820 1,821 0.1% 495 552 11.6% 546 636 16.5% 1,444 1,749 21.1%

ARPOB (` / day)(4) 29,683 30,922 4.2% 40,639 44,218 8.8% 26,771 31,210 16.6% 18,680 20,101 7.6% 31,473 30,755 -2.3%

Total Net Revenue (`mn)(4) NA NA 7,097 7,437 4.8% 2,775 3,126 12.6% 3,920 4,537 15.7% 9,050 10,141 12.1%

Notes:(1) Others include Madurai, Karur, Karaikudi, Trichy, Nellore, Mysore, Vizag, Karimnagar, Bilaspur, Bhubaneswar, Jayanagar, Nashik, Vizag new & Malleswaram.(2) Significant Hospital JVs/Subs/Associates are – Ahmedabad, Bangalore, Kolkata, Kakinada, Delhi, Indore & Assam (full revenues shown in table above).(3) Outpatient volume represents New Registrations only.(4) Revenues under Ind AS have been grossed up for Fixed fee Doctors & considered separately as operating cost. This was earlier being netted off from Revenues under Indian GAAP.(5) Revenues under the head “Total” have not been provided as Consolidated actual results will differ from Total due to proportionate consolidation.* Inpatient volumes are based on discharges.** Previous year financial and operational numbers have been regrouped and reclassified wherever necessary to conform with current year classification and full year audited numbers


Batch Particulars H1 FY 16 H1 FY 17 yoy (%)Upto FY10 Batch No. of Stores 782 769

Revenue/Store 6.91 7.56 9.5%EBITDA/Store 0.40 0.50 26.6%EBITDA Margin % 5.7% 6.6% 90 bps

FY11 Batch No. of Stores 158 155Revenue/Store 5.53 6.26 13.3%EBITDA/Store 0.26 0.40 55.2%EBITDA Margin % 4.7% 6.4% 173 bps

FY12 Batch No. of Stores 230 219Revenue/Store 5.01 5.69 13.6%EBITDA/Store 0.17 0.28 62.0%EBITDA Margin % 3.5% 5.0% 148 bps

Total SAP (Excluding Hetero)Total Revenues 10,546 12,672 20.2%EBITDA 394 575 46.1%EBITDA Margin % 3.7% 4.5% 81 bps

Hetero No. of Stores 299 261Revenue/Store 1.56 2.88 84.9%EBITDA/Store -0.06 -0.03EBITDA Margin % -1.1%

Total No. of Stores 2,217 2,430Revenue/Store 4.97 5.52 11.2%EBITDA/Store 0.17 0.23 36.8%EBITDA Margin % 3.4% 4.2% 79 bpsTotal Revenues 11,014 13,424 21.9%EBITDA * 377 567 50.4%EBITDA Margin % 3.4% 4.2% 80 bps

Capex (` mio) 169 204Capital Employed (` mio) 5,804 6,379Total ROCE % 9.1% 13.4% 432 bps

Key comments

` 13,424 mn22% yoy growth

H1 FY 17 Revenues

` 567 mn

H1 FY 17 H1 FY 16

` 377 mn

EBITDA

Added 148Closed 44Total 2,430

EBITDA Margins

4.2%

H1 FY 17 H1 FY 16

3.4%

# of Stores 30 Sep 16

H1 F

Y 17

10.4% (yoy)Pre FY08

Batch of stores

Like-for-like Revenue per store growth

7.3% (yoy)FY09Batch

ROCE>25%

Mature storesPre FY08 batch

Gross addition of69 storesAnd closed

22 in Q2 FY 17

EBITDA margins7.3%

Mature storesPre FY08 batch

SAP revenuegrew by 22%

EBITDA margins4.2%

H1 FY 17: Standalone Pharmacy operational performance (5/5)

SAP Revenues under Ind AS has been adjusted for the unredeemed discount points in the loyalty program,which impacts EBITDA margins of SAP by 25-30 bps.


Anchored for the Future5


Well planned strategy to deliver the next phase of growth (1/2)

• 4,565 operational beds (5,127capacity beds) in Tier I cities.Plan to add 980 beds by FY19.

• Ensure continued dominanceby expanding into key existingclusters of Chennai, Bangalore,Hyderabad, Kolkata, Delhi andAhmedabad

• Planned expansion in metroslike Mumbai & large cities likePune etc with no existingpresence – reaching to widerurban population

Increase Presence in IndianHealthcare Retail Space

• Increase in touch points with thepatient to strengthen Apollo’s abilityto be the premier healthcareprovider for the community

• Increase the network of healthcaredelivery formats - Clinics, SugarClinics, Dental, Cradle & Dialysis andDay Surgery centers through ourClinic subsidiary – AHLL

Cluster strategyfor expansion with Greenfield

projects in attractive newermarkets

Calibrated expansion inStandalone Pharmacies

• Standalone pharmacy business -Calibrated expansion plans with focuson same store growth, increasedprivate label sales and marginimprovement

- Mature stores same storeRevenue growth at 10%+

- Focus on increasing private labelsales - Target 20% of Revenues

- Plan to expand overall EBIDTAmargin to 6% over the next 3 years

- Margin improvement (RoCE of 25to 30%)

• 2,340 operational beds (2,757capacity beds) in Tier II cities.Plan to add 65 beds by FY17.

• Specialty care with integratedrehab at lower cost than Tier I

• Combination of Secondary andtertiary care anchored aroundCONECT

• Strong ICU focus combined withholistic medical care notavailable at nursing homes

• Given the growth forecast inUrban Rich and Urban middleclass, our focus is on selectivelyexpanding into Tier II Urbanizedcities

Grow laterally in high potentialTier II Cities


Well planned strategy to deliver the next phase of growth (2/2)

• Enhance Out-Patients focus bycreating value differentiators andleveraging on personalised healthchecks advantage with the aim ofincreasing topline contributionfrom out-patients

• Garner higher market share inselect acute and tertiary careservices

• Specific plan to further penetratedeeper into Cardiology,Neurosciences & Oncology

• Focus on time-to-serve andservice standards

• Optimised asset utilisations andminimum waste of all resourcesthorough standardised SOP’s and LeanManagement

• Higher patient turnover by reducingaverage length of stay and optimisedward processes for faster turnaroundtime of all diagnostic process

• Improving average revenue per bedday through richer case mix

Cost Efficiencies andFocus on Improving Key

Operating Metrics

Optimise Asset Utilisationin flagship facilities &

locations

Focus on Centers of Excellencewith one or two anchor

specialties in each market.Oncology – a growing area

across.

• Each of our key clusters besides beingbuilt around a quaternary carehospital, focus on one or two keyspecialties and build centers ofexcellence around that specialty

• Aim to gain significant market share ineach of the key specialties

• Set benchmark standards in clinicaloutcomes, technology and practices inselect acute and tertiary care services –Cardiology, Oncology, Neurosciences,Critical Care, Orthopedics andTransplants (CONECT)

• Extend and expand our oncologypresence both thru specialization andexclusive oncology referral hospitals inthe cluster 200 bedded Cancer referralcenter under construction in Chennaiwith Proton Therapy

Strong Doctor engagementModel and use of technology

– guided by our Clinicalexcellence focus

• Doctor engagement and Clinicalfocus probably is one of our corestrengths. Doctor engagement modelto be based on building group practicein key specialties with combination ofincentives based on revenue share/profit share

• Pioneers in use of technology tobuild robust health care systemscapable of addressing diverse patientneeds and changing disease profile –Da Vinci Robotics in 4 locations,Truebeam , NOVALIS, Cyber Knife,PET-CT, PET-MRI, ECMO, E-ICU etc.


New projects investment & fundingDefined expansion plan for owned bed capacity

* Expected date of completion# Standalone financials as on 30th Sep 2016

Total funding requirement` 15,204 mn

(already invested` 7,300 mn)

Significant headroomto raise capital

debt equity ratio 0.71x#

debt EBITDA 3.03x#

Gross Debt` 24,868 mn #

Cash & Cash equivalents` 2,911 mn#

Net Debt` 21,958 mn#

Location CoD* Type of Hospital No. Of Beds

Total EstimatedProject Cost

(INR mn)

Addition in FY 17Indore (expansion) FY17 Super Specialty 65 280Navi Mumbai FY17 Super Specialty 480 6024Sub Total 545 6,304Addition in FY 19South Chennai (incl Proton) FY19 Super Specialty 200 7,500Byculla, Mumbai FY19 Super Specialty 300 1,400Sub Total 500 8,900Total 1,045 15,204


Strong Management Team6


• Executive Chairman, Founder(M.D, MBBS, FCCP, FICA and FRCS)

• Conferred the Padma Vibhushan in 2010• Conferred the Padma Bhushan in 1991• Spent 33 years with Apollo Hospitals

Dr. Prathap C. Reddy

Executive Board

• Executive Vice Chairperson• On the Board since the year 1989• 30+ years healthcare experience

Dr. Preetha Reddy

• Managing Director• On the Board since the year 2000• 30+ years healthcare experience

Suneeta Reddy

• Executive Vice Chairperson,• On the Board since 2010• 30+ years healthcare experience

Shobana Kamineni

• Joint Managing Director,• On the Board since 2000• Received "Young Manager of the year 1998"

award from Hyderabad Management Association• Was a member of the Prime Minister's delegation

to Malaysia organized by the CII

Sangita Reddy

34


• Independent Director• On the Board since 2000• Previous Chairman of ICICI• Conferred the Padma Bhushan in

2009

N Vaghul

Independent Directors

• Independent Director• On the Board since 2014• Chairman of Feedback Infra Pvt

Ltd

Vinayak Chatterjee

• Independent Director• On the Board since 2005• Previous Chief General Manager

of Industrial Development Bankof India

G Venkataraman

• Independent Director• On the Board since 2000• Chairman of the Audit committee• Consultant at Symphony Partners

(Asia) Pvt Ltd

Deepak VaidyaSanjay Nayar

35

Habibullah Badsha

Rafeeque Ahamed

• Independent Director• On the Board since 1979• Previous Chairman/Managing

Director of Tokushu Menon PaperManufacturing Company

Rajkumar Menon

• Independent Director• On the Board since 2014• India Head of KKR• Previous India Country Head of

Citibank NA

• Independent Director• On the Board since 2001• Senior Legal Counsel in the

Madras High Court• Over 50 years standing in the

legal profession

• Independent Director• On the Board since 1979• Chairman- Tamil Nadu State Council• Chairman - Federation of Indian

Chambers and Commerce & Industry


Awards & Achievements

Awards &Achievements

Awards &Achievements

Voted No.1 amongst India’s Most Admired Companies inthe Pharma and Healthcare Sector

JCI Accreditation for 6 hospitals- Bengaluru, Chennai, Delhi,Dhaka, Hyderabad & Kolkata

Best Multi-specialty Hospital In India (2014): ApolloHospitals, Chennai Ahmedabad, Delhi, Kolkata & Hyderabadhospitals ranked No.1 Multi-specialty hospital in theirrespective cities

The ‘Gallup Great Places to Work 2014’ award inrecognition of Apollo engaging its workforce & leveragingthat strength to drive business results & sustainable growth

Four hospitals within the group have achieved the Stage 6designation of the HIMSS Analytics Electronic Medical RecordAdoption Model (EMRAM)™ for attaining significant advancementin its IT capabilities. As of Q1 2014, just 10.4% of more than 8,600hospitals tracked by HIMSS Analytics had reached Stage 6 andbeyond on its EMRAM and only 3.1% for Asia Pacific.

Apollo Health City Hyderabad was recognized as the “Best MedicalTourism Facility for 2009-2010” by the Ministry of Tourism –Government of India. Also bestowed the prestigious “InternationalMedical Tourism Award” for excellence in customer service by thereputed International Medical Travel Journal, UK

Dr. Prathap C Reddy, Founder & Chairman, was conferred with the“Lifetime Achievement Award” at the Asian Business LeadershipForum Awards 2013 & by CNBC TV18 at the 9th edition of IndiaBusiness Leaders Awards 2013

Dun & Bradstreet has ranked Apollo Hospitals 208th as perincome and 170th as per Net profits under India’s Top 500Companies 2014


In summary we have over the last 33 years focused consistently on putting the patient at the core of all that we do in

the pursuit of clinical excellence and in creating sustainable value for our stakeholders. We ensure strict adherence

to business ethics and our governance standards stand exemplar in the industry. With fast changing patient demands,

healthcare for the future is going to require evidence based care delivery through sustained process improvement

driven by standardization of knowledge assets. We are at the forefront of that journey. We will endeavor to leverage

technology proliferation in healthcare to collect, understand and utilize data to improve our care practices. We will

continue to empower the consumer through various on-line mechanisms and make it easy for them to take charge of

their well being. And we will offer our patients value based care by employing creative approaches for care

distribution—day surgery, specialty clinics and virtual care centres.

We do not operate in isolation, but rather engage deeply with the larger community towards its well being through

several initiatives like SACHi and SAHI which bring healthcare benefits to disadvantaged children and the Billion

Hearts Beating campaign which creates public awareness about cardiac health. Our CSR initiatives are founded on

the conviction we hold close to our hearts—that life and therefore the human body, is priceless, and every man

regardless of his economic background has a right to safeguard it the best way possible. While much still remains to

be done, we take pride that we are working towards creating a healthy tomorrow for generations to come.

THANK YOU

Documents

Apollo Hospitals · PDF filepresentation is not intended to be a prospectus (as defined under the Companies Act, 1956) ... 7% 37% Cardiology Oncology Neurology Orthopaedic Transplants