Motilal Oswal has given Buy recommendation for Apollo Hospitals recommended buy rating on the stock with a target price of Rs 5110 in its research r with a target price of Rs. 5110 in its research report issued on Aug 13, 2022
Motilal Oswal’s research report on Apollo Hospitals
APHS delivered an operationally in line 1QFY23 performance. It clocked a superior margin in the Hospital segment, led by an improvement in ARPOB. It also increased its spends in Apollo 24/7 in 1QFY23. We reduce our FY23 EBITDA estimate for APHS by 6%, factoring in: a) a higher operating cost for Pharmacy as well as the Apollo Health & Lifestyle (AHLL) segment. We continue to value APHS on a SoTP basis (22x EV/EBITDA for the Hospital segment, 30x EV/EBITDA for the Pharmacy and AHLL segment, and 4x EV/sales for Apollo 24/7) to arrive at our TP of INR5110. We remain positive on APHS on account of: a) a robust growth outlook in the Hospital segment, b) strong foundation build-up for the Online Pharmacy segment, and c) the addition of healthcare services through AHLL. We maintain our Buy rating.
We continue to value APHS on SOTP basis (22x EV/EBITDA for hospital segment, 30x EV/EBITDA for pharmacy/AHLL segment and 4x EV/Sales for Apollo 24/7) to arrive at price target of INR5110.