Motilal Oswal's research report on Apollo Hospitals Enterprises
Apollo 24/7 has launched insurance products on its online platform. It would be launching concierge service on its online platform as well. This would drive a surge in GMV as well as expand margins of Apollo healthco (AHL). APHS has chalked out plans to add 2,860 beds over the next three years in its current base of 7,942 operating beds. Also, the occupancy remains high at 68- 69%, boosting margins of the hospital business as well. In the physical format, APHS plans to add ~570 Apollo 24/7 stores in 2HFY25. These measures should help APHS provide comprehensive healthcare services to patients.
Outlook
We value the stock on an SOTP basis (32x 12M forward EV/EBITDA for the hospital business, 14x EV/EBITDA for the retained pharmacy, and 25x EV/EBITDA for AHLL, 22x EV/EBITDA for front-end pharmacy and 2x EV/sales for Apollo 24/7) to arrive at our TP of INR8,020. Reiterate BUY.
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