Buy Apollo Hospitals Enterprise; target of Rs 8350: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Apollo Hospitals Enterprise has recommended buy rating on the stock with a target price of Rs 8350 in its research report dated July 02, 2025.

Broker Research

July 02, 2025 / 11:57 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Apollo Hospitals Enterprise

Apollo hospitals enterprise’s (AHEL) announced a composite scheme involving the demerger of its Omnichannel Pharmacy business, 24*7, and telehealth business into a newly listed entity (NewCo) followed by the recent merger of Keimed Pvt Ltd and Apollo HealthCo. A business framework agreement signed to ensure non-compete and synergy alignment between AHEL and NewCo, with clear role demarcation - AHEL to focus on core healthcare and NewCo on pharmacy & digital. The demerger was on expected lines and is aimed to unlock value by creating a focused, high-growth platform in the pharmacy and digital healthcare space, which is more consumer centric in nature. The stake sale in HealthCo to Advent and merger with Keimed are a positive step and will lead to an integrated pharmacy distribution business. Scale-up in Apollo HealthCo has been on track with likely breakeven in EBITDA of digital business over the next 4 quarters. Further, the management reiterated its guidance of Rs17.5bn EBITDA for NewCo entity by FY27, which provides comfort.

Outlook

Overall, we estimate 27% EBITDA CAGR over FY25-27E. We maintain ‘BUY’ rating with TP of Rs 8350/ share. We ascribe 26x EV/EBITDA multiple to hospital, 30x EV/EBITDA to offline pharmacy and 1x sales to the 24/7.

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