Motilal Oswal has given Buy recommendation for Apollo Hospitals recommended buy rating on the stock with a target price of Rs 5110 in its researc with a target price of Rs. 5110 in its research report issued on May 25, 2022

Motilal Oswal’s research report on Apollo Hospitals

We analyzed the FY22 Annual Report of Apollo Hospitals Enterprises (APHS) and present the key takeaways in this report. Our analysis indicates that APHS achieved the highest return ratio in FY22 historically, from an all-time low return ratio in FY21. The company exceeded pre-Covid profitability in FY22, driven by improved performance across segments – healthcare services, pharmacy and Apollo Health and Lifestyle (AHLL) and aided by Covid to some extent. Interestingly, its operating parameters in healthcare services (ARPOB/ occupancy) and pharmacy (number of stores/average revenue per store) segments are on an uptrend with scope for further improvement. Front-loading of investments to Apollo 24/7, though, would moderate margins/return ratios in FY23. However, the exponential rise in GMV aided by back-end infrastructure, positions APHS favorably in this segment. Even the capex for bed addition would be funded from internal accruals.

Outlook

We remain positive on APHS because of: a) its superior positioning in the pharmacy segment through offline/online presence supported by strong back-end infrastructure, and b) enhanced outlook for healthcare services/AHLL segment. Maintain BUY with a TP of INR5,110.

More Info

At 15:40 hrs Apollo Hospitals Enterprises was quoting at Rs 4,214.25, up Rs 44.45, or 1.07 percent.

It has touched an intraday high of Rs 4,234.75 and an intraday low of Rs 4,153.00.

It was trading with volumes of 14,475 shares, compared to its thirty day average of 27,697 shares, a decrease of -47.74 percent.

In the previous trading session, the share closed down 0.96 percent or Rs 40.55 at Rs 4,169.80.

The share touched its 52-week high Rs 5,930.70 and 52-week low Rs 3,365.90 on 26 November, 2021 and 26 May, 2022, respectively.

Currently, it is trading 28.94 percent below its 52-week high and 25.2 percent above its 52-week low.

Market capitalisation stands at Rs 60,594.45 crore.

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