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Motilal Oswal
Apollo Hospitals Enterprise Ltd (Buy)
Target: ₹5,900
CMP: ₹4,846.20
Apollo Hospitals Enterprise Limited (AHEL) has become a premier name in the Indian healthcare segment on the back of its centres of excellence across its 30 mature hospitals. Its 13 new hospitals are now nearing maturity, contributing to its growth and profitability.
At the same time, AHEL is rapidly strengthening its adjacencies in healthcare services through the Apollo 24|7 platform, which has an unpatrolled reach and turnaround time, powered by its expansive network of 4,300 retail pharmacy stores. We expect its omni-channel differentiated factor to be the preferred mode for online pharmacy going forward, enabling AHEL to garner a nearly 14 per cent market share in e-pharmacy over the next five years.
Additionally, the improving profitability and expansion of Apollo Health And Lifestyle Limited will act as another growth lever.
Considering the multiple growth levers in place to drive its business, we expect AHEL’s revenue to grow at CAGR of 16 per cent and earnings to grow at CAGR of 30 per cent over FY22-24 to ₹19,200 crore and ₹1,600 crore, respectively. We initiate coverage on AHEL with an SOTP-based target price of ₹5,900 and a Buy rating.
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