Shares of Apollo Hospitals Enterprise rose 2% in early trading on May 30 as investors pinned their hopes on a strong earnings performance from the healthcare services major. The company is scheduled to release its fourth-quarter numbers later today.

Shares of Apollo Hospitals were trading at Rs 4,697.11 on the NSE at 11:56 am, up 1.11% from the previous close. Volume was also high, with 600,000 shares changing hands on the exchange, compared with a one-month daily average of 300,000 shares.

Street analysts say the company’s fourth-quarter net profit may have come in at around Rs 198 crore, more than triple the Rs 93.99 crore posted a year earlier. A favourable base and strong seasonality will help the net profit increase in this quarter.

Cost optimisation and better occupancy rates at new hospitals are also expected to aid revenue growth. “We expect hospital occupancy to rise sequentially as the third quarter is impacted by the holiday season,” brokerage Jefferies said in its report.

Likewise, revenue is expected to rise 21.3% year-on-year to Rs 4,302.7 crore compared to Rs 3,546.43 crore in the previous fiscal.

Jefferies also believes that Apollo Hospitals could benefit from lower losses in its HealthCo unit as revenue rises and investments peak. Nonetheless, the company’s 24*7 segment’s expenses will likely remain elevated year-over-year, weighing on its operating results.

As a result, Q4 EBITDA margins may contract by 110 bps YoY to 12%.

In the December quarter, Apollo HealthCo recorded a net loss of Rs 63 crore, while costs related to Apollo 24/7 reached Rs 202.4 crore. However, management had guided that losses at its HealthCo unit had peaked in the December quarter and would recover gradually, with breakeven expected in the second half of FY24.

The company also guided that Apollo HealthCo’s losses will be funded through internal accruals over the next six months, meaning operating margins could be flat sequentially but contracted year-over-year.