Hold on Apollo Hospitals; target of Rs 1415 :Axis secruties

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26 Aug, 2025 12:21

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Axis securities research report on Apollo Hospitals (APHS), Apollo Hospitals continues to deliver 15-20% consolidatedrevenue growth (9MFY16: up 17% YoY), but EBIDTA growth has been suppressed (up 8% YoY). While EBIDTA margin of matured hospitals (55% of 9MFY16 rev and 93% of EBIDTA) has been maintained over 23%, blended EBIDTA margin stood at 13.3% (vs. 14.4%) due to loss from new hospital beds added (EBIDTA loss of Rs 2 mn), Rs 250 mn loss from Apollo’s clinics business (AHLL), and rising contribution from low margin standalone pharmacies.However,we expect gradual improvement in EBITDA margin with key performance metrics improving/ on track: 100% YoY rev growth in new hospitals (low base) with EBIDTA loss reducing from Rs 650 mn to Rs 2 mn, rev growth coupled with margin expansion in pharmacies, sustained EBIDTA margin from existing facilities.Over the last couple of years, APHS has added 1,300 beds and is further adding 500 beds in Q4FY16 and~ 500 beds in Q1FY17. Only 2 more facilities with 500 beds to come on stream in FY19. With the investment phase of APHS nearing completion, we expect 18-20% revenue CAGR coupled with gradual improvement in EBIDTA margin as beds and pharmacies mature.Quarterly Update HOLDTarget Price: Rs 1,415 CMP : Rs 1,446 Potential Upside : -2%MARKET DATA No. of Shares : 139 mn Free Float : 66% Market Cap : Rs 201 bn 52-week High / Low : Rs 1,525 / Rs 1,132Avg. Daily vol. (6mth) : 213,615 shares Bloomberg Code : APHS IB EquityPromoters Holding : 34%, FII / DII : 44% / 1% Maintain HOLD with TP of Rs 1,415For all recommendations, click hereDisclaimer: 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.

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