Buy Apollo Hospitals, target price Rs 8,020: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on Apollo Hospitals Enterprise with a target price of Rs 8020. The current market price of Apollo Hospitals Enterprise is Rs 6988 . Apollo Hospitals Enterprise, incorporated in 1979, is a Large Cap company with a market cap of Rs 9,9716.10 crore, operating in Hospitals & Allied Services sector.

Apollo Hospitals Enterprise, key Products/Revenue Segments include HealthCare Services and Other Operating Revenue for the year ending 31-Mar-2024.



Financials
For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 5627.50 crore, up 9.85% from last quarter Total Income of Rs 5122.80 crore and up 15.58 % from last year same quarter Total Income of Rs 4869.10 crore. The company has reported net profit after tax of Rs 390.00 Crore in the latest quarter.

Investment Rationale
Motilal Oswal Financial Services expects 20%/ 18% EBITDA/PAT CAGR over FY24-FY27 fueled by a) adding newer offerings and controlled cost driving better profitability of Healthco b)higher number of patients being treated through adding beds/better occupancy, and c) healthy execution in diagnostic business. The brokerage values the stock on an SOTP basis (32x 12M forward EV/EBITDA for the hospital business, 14x EV/EBITDA for the retained pharmacy, and 25x EV/EBITDA for Apollo Hospitals Enterprise, 22x EV/EBITDA for front end pharmacy and 2x EV/sales for Apollo 24/7) to arrive at the target price of Rs 8,020. The company has reiterated a BUY.

Promoter/FII Holdings
Promoters held 29.33 per cent stake in the company as of 30-Sep-2024, while FIIs owned 45.37 per cent, DIIs 19.83 per cent.