Buy Apollo Hospital; target of Rs 541: Firstcall Research

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Buy Apollo Hospital; target of Rs 541: Firstcall Research

Firstcall Research is bullish on Apollo Hospitals Enterprises and has recommended buy rating on the stock with a target of Rs 541 in its January 13, 2011 research report.

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Firstcall Research is bullish on Apollo Hospitals Enterprises and has recommended buy rating on the stock with a target of Rs 541 in its January 13, 2011 research report.

"Apollo Hospitals has entered into a strategic alliance with IT giant Cisco for providing Telemedicine services in the country. The Apollo Hospitals Group has signed a memorandum of understanding with the Union Government to set up Central Government Health Scheme - Apollo Dialysis Clinics. It has expanded its global reach with the opening of Apollo Bramwell Hospital in Mauritius and proposes to set up a 200-bed hospital in Shanghai at an investment of USD 120 million, 150-bed hospital in Vienna for USD 95 million and a hospital in Nigeria. Apollo Hospitals is planning to add 2,600 beds within the next three years for an investment of Rs 1,500 crore to Rs 1,600 crore. Apollo Hospitals has decided to make investments to the tune of Rs 1,800 crore over the next two years for building new hospitals across the country."

"The Net sales and PAT of the company is expected to grow at a CAGR of 21% & 19% respectively over FY09 to FY12E. On the basis of price to book value, the stock trades at 3.38x and 3.02x for FY11E and FY12E respectively. On the basis of EV/EBITDA, the stock trades at 15.17 x for FY11E and 13.54 x for FY12E. At the current market price of Rs 470 the stock is trading at a P/Ex of 32.47x for FY11E and 28.85x for FY12E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'STRONG BUY' in this particular scrip with a target price of Rs 541 for medium to long term investment," says Firstcall Research report.

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To read the full report click on the attachment