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Last Updated : Oct 07, 2011 10:30 AM IST | Source: CNBC-TV18

Hold Indraprastha Medical: Aashish Tater

Hold Indraprastha Medical Corporation for long term, says Aashish Tater, Head of Research, Fort Share Broking.

Hold Indraprastha Medical Corporation for long term, says Aashish Tater, Head of Research, Fort Share Broking.

Tater told CNBC-TV18, "Thanks to market carnage, medical tourism is going to be there and I think Indraprastha Medical is definitely going to be beneficiary. Taking a call from fundamental perspective this particular company is having a parentage both from government and also from Apollo Hospital. Now what interested me into this particular stock was its market cap to sales ratio. If you look at the company from two years perspective they would do somewhere around Rs 720 odd crores in terms of topline and would do that 7% net profit margin and is available right now at Rs 250-260 odd crore market cap."

He further added, "Apollo Hospital on other hand trades almost two times its market cap to sales. Now if I take a call that this is a smaller version of Apollo Hospital but what is interesting from a longer-term perspective is that the management has chalked out an interesting plan, they will come up with mini-satellites that is what they call as mini hospitals, which will provide patients with post operational services which will add to the bottom-line significantly and to open these kinds of mini-hospitals they have right now chalked out close to 10 mini-hospitals or min-clinics, which can provide these kinds of emergency services for patients who have already been treated to Apollo clinics. So this is going to be a concept of future when the parent will be doing very well because of its strong hold into its business and because of its ancillary services this stock would be re-rated."

"So from two years perspective, the market cap to sales ratio would be hovering somewhere around 0.8 times. If one looks at the dividend yield, it is right now available at 5.5 % dividend yield. Apollo Group Company which itself is available at less than 1% dividend yield, on the contrary its subsidiary, I would not call it a subsidiary, its holding is having a dividend yield of 5.5%."

"I think there is hardly any downside on to the stock. But if someone has patience to hold it for two and two and half years his money can double in this timeframe; one because of its unique business model that the company is coming up with ten mini satellite, the company can do a revenue of close to Rs 18 crore in FY13 and the potential of this mini-satellites is up to 50 mini clinics across the NCR Region and if the model becomes extremely successful, I think this will be rolled out pan India across Apollo Group Hospitals."

First Published on Oct 7, 2011 09:47 am