ICICI Direct is bullish on Apollo Hospitals has recommended buy rating on the stock with a target price of Rs 1400 in its research report dated February 11, 2019.
ICICI Direct's research report on Apollo Hospitals
The Q3FY19 standalone operational performance was in line with I-direct estimates while net profit was lower mainly due to higher-than-expected interest cost and depreciation Revenues grew 14.4% YoY to Rs 2169 crore (I-direct estimate: Rs 2145.8 crore) due to 13.9% growth in pharmacy to Rs 1011.9 crore (I-direct estimate: Rs 1043.2 crore) and 14.8% YoY growth in healthcare business to Rs 1157.3 crore (I-direct estimate: Rs 1102.8 crore) EBITDA margins improved 68 bps YoY to 12.3% (I-direct estimate: 12.6%) mainly due to lower other expenditure. EBITDA grew 21.1% YoY at Rs 267.9 crore (I-direct estimate: Rs 271.0 crore) Net profit grew 28.9% to Rs 86.9 crore (I-direct estimate: Rs 93.3 crore) mainly due to strong operational performance.
We value the stock on SOTP basis by valuing the healthcare business (existing hospitals & JV) at 14x FY21E EV/EBITDA, healthcare business (new hospitals and JVs) at 1.5x FY20E and pharmacy business at 1.2x FY20E EV/sales. We ascribe a target price of Rs 1400. We believe the reaction on account of additional pledging of shares by for KKR unwinding is slightly overblown.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Assembly Election 2019 Results Updates:
Catch Maharashtra Election Result 2019 updates, news and views here
Catch Haryana Election Result 2019 updates, news and views here
Catch Bypoll Results 2019 updates, news and views here
For full coverage, click here.The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .