Subscribe to PRO at just Rs.33 per month. Use code SUPERPRO
Last Updated : May 25, 2012 12:41 PM IST | Source: CNBC-TV18

Indraprastha Medical can move to Rs 50: SP Tulsian

Indraprastha Medical can move to Rs 50 in next twelve months, says SP Tulsian, sptulsian.com.

Indraprastha Medical can move to Rs 50 in next twelve months, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, “Indraprastha Medical, they are operating Indraprastha Apollo Hospital in Delhi which is in fact termed as the second best hospital in Delhi and fifth best in India. If you see this hospital, it is located on a land of about 6,75,000 sq ft and they have 695 beds of which 140 beds are intensive care unit (ICU) beds. The financial performance has been quite robust. In fact for FY12, the company posted a topline of close to about 500 crore and the profit after tax (PAT) in fact it is only the PAT margin which is quite low at about 5%, they have posted a PAT of about 27 crore, which resulted into an EPS of Rs 3.”

He further added, “If you go by the structuring of the company, it is a joint sector company, in which 26% is held by the Delhi government and 25% is held by the Apollo Hospitals and remaining maybe about 30% is held by HNIs of which about 11% - 9% close to 9.5% is held by HDFC and 1.5% is held by Tata Investment Corporation. So one can take that about 85% stake is held between the promoters and the HNIs and very low float of 92 crore equity is with the public. The company posted an EPS of close to about Rs 3 for FY12, out of this 60% has been the dividend pay out. Company declared a dividend of 16% which itself results into an yield of about 5% and if you see the management structuring of the company, the company has 15 directors on the board of the company which also signifies that they have a very good corporate governance and the kind of presence the hospital has, they are practically in every field where the people of Delhi rely upon like cardiology, oncology, orthopedic, emergency services and all kind of things. Apart from that they have one hospital i.e. Apollo Hospital at Noida also. In spite of these two properties, as I said this is one of the largest corporate hospital in the world, the enterprise value of the company is quite low with marketcap of close to about Rs 310-315 crore and a very low debt of about Rs 90 crore.”

“If you see the Apollo Hospital which is ruling at a P/E multiple of about Rs 23-24 and even the Fortis Healthcare has been ruling quite high, I think this stock has not been looked by the market and if someone can take a look to the stock even from a dividend yield of about 5% because I don’t think that one can get worried on the downward risk of the stock, it cannot fall below Rs 30 but at Rs 33 I think the stock looks quite good from an investment point of view and I am expecting that probably the price could move to about Rs 50 in next twelve months or so.”

Disclosure: No holding or interests in above stocks.

First Published on May 25, 2012 09:13 am