Apollo Hospitals - Near-term profitability under pressure, but a good long-term bet: CRISIL

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

CRISIL's research report on Apollo Hospitals

 
Apollo Hospitals Enterprise Ltd’s (Apollo’s) Q1FY18 standalone and consolidated earnings were below CRISIL Research’s expectations. Standalone revenue increased 14.9% y-o-y, driven by the pharmacy business (revenue up 21% y-o-y). The healthcare services business (hospitals) grew at a slightly slower pace of 10.5% y-o-y to Rs. 9.2 bn owing to relatively muted volume growth in Q1FY18. Regulatory cap on stent prices, EBITDA losses at the newly commissioned hospitals and increase in the guarantee money paid to doctors impacted EBITDA by Rs. 350 mn. Consequently, EBITDA margin contracted 252 bps y-o-y (slight improvement of 7 bps q-o-q) to 10.3%. Consequently, adjusted PAT declined 51.2% y-o-y and 26.9% q-o-q to Rs. 352 mn. We expect revenue growth to sustain in the future, aided by the pharmacy business and ramp-up in occupancy at the new hospitals. Given its well-established position, robust long-term industry prospects and proven management capability, we maintain our positive stance on the company and retain our fundamental grade of 5/5.

We have lowered our earnings estimates to factor in higher-than-expected operating expenses at the new hospitals and revised our discounted cash flow (DCF)-based fair value to Rs. 1,320 from Rs. 1,510. At the current market price of Rs. 994, our valuation grade is 4/5.

Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report.  The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.

CRISIL Limited. All Rights Reserved. Published under permission from CRISIL"

Related stories

Source:

Read More