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Last Updated : Jun 12, 2018 02:44 PM IST | Source: Moneycontrol.com

Buy Apollo Hospitals; target of Rs 1700: Edelweiss

Edelweiss is bullish on Apollo Hospitals recommended Buy rating on the stock with a target price of Rs 1700 in its research report dated May 31, 2018.

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Edelweiss' research report on Apollo Hospitals


Despite a strong Q4FY18 performance, the Apollo Hospitals’ (APHS) stock came off 3.8% today, after slipping 20% in past three months. What’s driving this weakness in the stock price? Regulatory headwinds have been unsettling for the hospital players. Other external factors like: i) demonetisation; ii) GST; iii) stents, knee implants and drug price control; and iv) increase in minimum wages for nurses in some states also marred sector profitability. Going ahead, some states are also trying to cap gross margins on consumables, which could further affect gross profits. Instead of addressing structural issues of the healthcare sector, populist measures are being offered. This has led to uncertainty and the APHS stock bears testimony to same.


Outlook


As for APHS’ performance, having completed its capex cycle it is set to double EBITDA and reduce capex to one-third over the next three years. Maintain ‘BUY’ with SoTP-based target price of INR1,700.


For all recommendations report, click here


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First Published on Jun 12, 2018 02:44 pm
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