Apollo Hospitals shares were trading at Rs 4,695 on BSE, up 7.14%. The stock has surged over 50% in the last one year and is expected to further rally, going forward.
Apollo Hospitals share price surged over 7% on Thursday after the National Stock Exchange (NSE) had announced that the stock would be included in the benchmark Nifty 50 index effective from March 31. Inclusion of Apollo Hospitals into Nifty 50 is expected to result in inflows of $143 million from exchange-traded funds (ETFs) that mirror the index, according to brokerage firm Edelweiss Securities. Apollo Hospitals shares were trading at Rs 4,695 on BSE, up 7.14%. The stock has surged over 50% in the last one year and is expected to further rally, going forward.
Stock Talk: Should you buy Apollo Hospitals shares?
Edelweiss: BUY
Target price: Rs 5,500
Analysts at Edelweiss Securities believe that Apollo Hospitals is well poised for long-term sustainable growth on account of focus on improving asset utilisation to achieve best-in-class occupancy of 75% and improve margins; AHLL turnaround; and strong balance sheet to support future growth. “While 24*7 investments are yet to fructify, we believe APHS’s omni-channel presence is a step in the right direction,” the brokerage said. It has a ‘Buy’ rating on the stock with a target price of Rs 5,500. Analysts value the core pharmacy business at 40x and hospitals at 24x EBITDA, given high growth potential.
Motilal Oswal: Buy
Target price: Rs 5,630
Analysts at Motilal Oswal expect 17% EBITDA CAGR over the next two financial years, led by a 21%, 14%, 13% sales CAGR in Pharmacy, AHLL and Hospital segment respectively. The domestic brokerage house remains positive on AHEL as it is one of the leading beneficiaries in the Pharmacy segment due to its established back-end distribution as well as front-end. Product launch on Amazon.com to help scale-up its customer base as well as provide last-mile connectivity to the customer, and improving ARPOB/occupancy in the Hospital segment along with enhanced prospects in the AHLL segment are a few other factors behind the positive outlook. “We maintain our Buy rating on the stock,” the brokerage said.
Nomura: BUY
Target price: Rs 5,247
The company is exploring opportunities to expand its hospital bed capacity in key cities. According to analysts at Nomura, These potential expansion plans could have investment of Rs 26-27bn over next three years. The company is also expected to achieve cumulative sales of $1 billion through its Amazon partnership over the next 3-4 years. “We retain our valuation multiple for the hospital business at 20x EV/EBITDA. The valuation is supported by an improvement in the hospital business profitability and ensuing expansion plans,” Nomura said. The brokerage has a Buy rating on the stock with a target price of Rs 5,247.
Geojit: Buy
Target price: Rs 5,416
According to Geojit Financial Services analysts, the company is growing organically with rising efficiency and productivity, continuous expansion across new & existing markets via digitalization, increased capex, omnichannel approach and quick response to COVID-needs. “We have a positive outlook on company’s growth prospects and upgrade our rating to BUY with a rolled forward target price of Rs 5,416 based on SOTP valuation.
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