Hold Apollo Hospitals Enterprise; target of Rs 6215: ICICI Securities

ICICI Securities research report on Apollo Hospitals Enterprise

Apollo Hospitals’ (Apollo) Q1FY25 revenue and EBITDA were in-line with our estimates. Apollo is aiming for a 100bps improvement in its hospital margins driven by a 7% YoY increase in its ARPOB in FY25 and better occupancy. Hospital occupancy touched 68% in Q1FY25 vs. 65% in Q4FY24; seasonality will likely elevate it in the next two quarters. The addition of 1,170 greenfield beds has been pushed up from Q4FY25 to Apr–June’25 – the delay may dent hospitals’ EBITDA margins by 100–150bps in FY26E. GMV growth in 24/7 slowed to 9% in Q1FY25 while operating cost dipped a mere 7% QoQ to INR 1.3bn.

Outlook

Management continues to expect a 50% rise in GMV in FY25 and an EBITDA breakeven of 24/7 in the next 6–7 quarters. We retain HOLD, but raise our SoTP-based TP to INR 6,215 (from INR 6,100).