Brokerage house Citi gave BUY rating to Apollo Hospitals Enterprise Limited and set a target price of Rs 9,600 per share. On Tuesday the company shares closed at Rs 7,220. Based on this level, brokerage has suggested a growth possibility of about 33 percent from the current level.
According to Citi, the company’s current valuation is attractive and the stock is trading below its historical average. The brokerage cited third quarter earnings, improved margins and valuations as favorable factors.
On Wednesday 11 February, the Indian stock market opened with a flat start. Rise in Reliance Industries and auto sector shares supported the market, but selling pressure was seen in realty and government banking shares.
According to the brokerage report, the operational performance of Apollo Hospitals remained strong in the third quarter. In Q3, the company’s total revenue reached approximately Rs 6,500 crore and EBITDA was recorded at Rs 970 crore. These figures indicate annual growth of 17 percent and 27 percent respectively.
The company led the growth of its core hospital business. Hospital business revenue recorded 15 percent annual growth in Q3. The company continued to be profitable despite adding new hospital capacity. Hospital business margin increased by 60 basis points to 24.5 percent.
Apollo HealthCo also broke the overall performance. Spending on the Apollo 24/7 platform declined 12 percent annually. Apollo HealthCo margins improved by approximately 210 basis points due to cost optimization.
According to Citi, the company’s business is strong, its balance sheet is stable and its long-term growth outlook is clear.
As per the previous performance, the share has increased by about 5 percent in the last one month. The share is almost flat in three months and six months. The shares gave approximately 20 percent return in one year. The share grew by 18 percent in two years and about 72 percent in three years.
Apollo Hospitals’ 52-week high is Rs 8,099 and 52-week low is Rs 6,002.15. The current price is between these two levels.
The company market capitalization on BSE is around Rs 1,08,899 crore.
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