Apollo Hospitals Enterprise gained favour from analysts on the Street after it not just delivered strong Q3 results but also charted out expansion plans to drive future growth. According to data from Moneycontrol's Analyst Call Tracker, the stock took the second spot on the list of maximum upgrades in the last one month.
'Buy' calls for the stock went from 22 last month to 25 in February while 'hold' calls fell to two from the previous three and 'sell' rating climbed down to just one, from the earlier three. With these slew of upgrades, Apollo Hospitals also landed on the list of stocks enjoying the maximum optimism from analysts on the Street.
The company's aggressive bed expansion plans for its flagship hospitals business was taken with much appreciation from the Street for securing engines for future growth. Meanwhile, the company also remains focused on consistently lifting its average revenue per occupied bed (ARPOBs), and occupancy levels which have also worked in bolstering sentiment.
Apollo plans to expand its capacity by adding 1,400 census beds by FY26 across tier-1 cities, along with around 1,700 beds through a greenfield project set to commence in the next 3–4 years. The company is also exploring bolt-on acquisitions in select tier-1 cities and metro areas.
With this, brokerage firm SMIFS noted that rising ARPOB, improved occupancy, and increasing surgical volumes Apollo remains well positioned to boost hospital margins in the near term.
In addition to that, the recent correction in the stock, largely driven by lofty valuations in a phase of overall market downturn has also made Apollo a lucrative buy. SMIFS had attributed this correction as a major trigger in upgrading Apollo to 'accumulate' last month.
Furthermore, ICICI Securities also holds an optimistic view over Apollo Hospitals. "Online pharmacy may touch EBITDA margins of 18-20 percent pre-24/7 operating cost and ESOP cost in next 3-4 quarters. Apollo HealthCo may grow 15-18 percent for the next couple of years driven by diagnostics and clinics while margins are likely to expand 200 basis points every year," ICICI Securities projected.
Factoring these tailwinds, ICICI Securities also chose Apollo Hospitals as its top pick within the healthcare segment.
The bottomline remains that Apollo offers strong growth visibility across its segments. In hospitals, the company is benefiting from improving occupancy rates, ARPOB growth, and capacity expansion. HealthCo continues to see steady growth in its offline business while scaling up Apollo 24/7. Meanwhile, AHLL is experiencing consistent growth alongside margin expansion, reinforcing Apollo’s long-term growth trajectory.
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