Buy Apollo Hospitals Enterprise; target of Rs 7150: Prabhudas Lilladher

BUY

Prabhudas Lilladher's research report on Apollo Hospitals Enterprise

Apollo Hospitals Enterprise (APHS) reported consolidated EBITDA of Rs6.75bn (up 33% YoY), in line with our estimates. Adjusted for 24x7 losses and ESOP cost (~Rs1.5bn), EBITDA was Rs8.24bn, up 16% YoY. The recent stake sale in HealthCo to Advent and merger with Keimed are a positive step and will lead to an integrated pharmacy distribution business complemented by the fast-growing omni-channel digital health business. Our FY25E and FY26E EBITDA estimates broadly remain unchanged. Overall we estimate 18% EBITDA CAGR over FY24-26E (ex 24x7 losses).

Outlook

We maintain ‘BUY’ rating with a TP of Rs7,150/share. We ascribe 25x EV/EBITDA multiple to hospital and offline pharmacy, and assign 1x sales to the 24/7 business.

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Apollo Hospitals Enterprise - 190824 - prabhu