Buy Apollo Hospitals Ltd For Target Rs.7,219 By Choice Broking Ltd
* Healthcare Services: Hospital revenue grew by 15% YoY and 2.9% QoQ to INR 26,373 mn, driven by an 11% YoY increase in inpatient volumes and a 4% contribution from price and case mix. Occupancy stood at 62%, and ARPP grew by 3%. EBITDA increased in line with revenue, rising 15% YoY to INR 6,217 million, with a stable margin of 23.6% compared to last year. Revenue from insurance patients saw a 17% YoY increase. The company’s plan to operationalize four new hospitals, adding 1,500 beds in key markets, is progressing as scheduled. Improved occupancy is anticipated with the pickup in the insurance patients, and a better ARPOB is expected in Q2FY25.
* Outlook & Valuation: The positive outlook on Apollo Hospitals Enterprise Limited (AHEL) is upheld based on several factors, including increased volume and bed capacity in the healthcare service business, improved share from international business, continuous addition of pharmacy stores, looking for inorganic growth opportunities in the digital business, and margin expansion on consolidated level. The stock is valued through a SOTP analysis, resulting in a target price of INR 7,219 with a BUY rating on the stock.
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SEBI Registration no.: INZ 000160131
