In an interview with CNBC-TV18, K Padmanabhan, group president of Apollo Hospital spoke about the latest happenings in his company and FDI in retail.Padmanabhan said that they will evaluate both financial and strategic partnerships to extract value from the pharmacy retail business.
Below is the edited transcript of the interview.
Q: When FDI in retail opens up, will Apollo Hospital actively consider tie-ups on the retail pharmacies?
A: We have seen that the government has announced freeing up of FDI in retail but we are continuing to build the pharmacy business. We have been able to prove some of our skeptics wrong in terms of turning EBITDA positive quite early.
We are in the process to post fairly good profits in the pharmacy business. We will continue to build value and we will evaluate opportunities as we go along. It is not the right time to look at how we can extract value out of this business, but as we go along we will see. Freeing up of FDI also opens up another opportunity.
Q: Has the management considered getting a foreign partner in terms of adding financial strength to expand the business or to lend expertise in the retail business?
A: Our long-term goal is to focus on healthcare delivery. We have a large profitable pharmacy retail business and we would look at both financial and strategic partners. However, more in terms of how we can get somebody to help us build this business even better. Yes, we would evaluate both financial and strategic partnerships to extract value out of this business.
Q: Have any global players shown their interest? Have you had any preliminary discussion for Apollo Pharmacy?
A Given that we are the only large retail pharmacy player, lots of people have approached us for several years. We have kept those discussions going and we are waiting for the right opportunity.
Q: How do you value this asset in terms of sales or profits it may generate? What enterprise value you would attach to the pharmacy business?
A: The pharmacy retail is a strategic asset both for financial and strategic investor and a lot of valuations are on matrix of revenues. But it’s too early to talk about valuation. Given the geographical spread and the emerging profitability of our pharmacy business, valuation will not be very critical for Apollo’s pharmacy retail business.
As reported in: http://www.moneycontrol.com/news/business/apollo-hosp-open-to-foreign-tie-ups-for-pharmacy-biz_625990.html