Buy Apollo Hospitals Enterprise; target of Rs 5300: Prabhudas Lilladher

Prabhudas Lilladher's research report on Apollo Hospitals Enterprise

Apollo hospitals enterprise’s (APHS) consolidated EBITDA at Rs4.9bn (down 3% QoQ) was below our estimate. Adjusted for 24x7 losses (Rs2.2bn), EBITDA was at Rs 7.1bn, flat QoQ vs our est of Rs7.3bn. We believe APHS has created a solid growth platform across segments and digital foraying has further made it a strong Omni channel play. The company also has good presence in offline format, making it more of a formidable player than just pure play online company. Though stake sale in Apollo HealthCo has been delayed, scale up in business is on track. Our FY24 and FY25E EBITDA stands reduced by ~3%.

Outlook

Overall we estimate 18% EBITDA CAGR over FY23-25E (ex 24x7). Maintain ‘BUY’ rating with revised TP of Rs5,300/share. We ascribe 22x EV/EBITDA multiple to hospital segment and 20x to offline pharmacy and AHLL, also assign zero value to the 24/7 business.

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