Apollo Hospital’s stock experienced a notable ascent, climbing over 3% during the early trading hours on Friday. This uptick followed the announcement of a significant 77% increase in net profit for Q4, reaching an impressive Rs 258 crore year-on-year. Shares of the hospital chain peaked at an intraday high of Rs 5,959.35 per share on the NSE, marking a 3.23% rise.
The preeminent hospital conglomerate disclosed a substantial 77% augmentation in its consolidated net profit, amounting to Rs 258 crore for the fiscal quarter concluding in March 2024. The revenue generated from operations during the January-March 2024 timeframe witnessed a 15% year-on-year enhancement, totaling Rs 4,944 crore.
In the scrutinized March quarter, the EBITDA registered at Rs 640 crore, a significant increase from Rs 488 crore during the corresponding period the previous year. The EBITDA for the healthcare segment alone surged by 11%, reaching Rs 593 crore, with margins settling at 23.1% for the period under review.
However, accounting for the Rs 151 crore expenditure incurred by Apollo 24*7 for the quarter (which includes a non-cash ESOP charge of Rs 106 million), the healthcare segment reported a revenue of Rs 2,563 crore. This denotes a 17% year-on-year growth from the Rs 2,195 crore recorded in Q4FY23.
Brokerage Perspectives on Apollo Hospitals
Prabhudas Lilladher’s Take on Apollo Hospitals
Prabhudas Lilladher maintains a “Buy” recommendation for Apollo Hospitals, setting a target price at Rs. 7,050 per share. The brokerage firm anticipates the potential merger with Keimed will eliminate any concerns regarding revenue leakage, estimating this merger to be a favorable development.
A report from Prabhudas Lilladher highlights that Apollo Hospitals Enterprise’s fully-owned subsidiary, Apollo Health, has entered into an agreement to secure Rs. 24.75 billion ($300 million) in equity capital from Advent International (Advent) for a 16.8% stake. Additionally, Apollo Health has outlined plans for the phased integration of the promoter group entity, Keimed Pvt Ltd (Keimed), into Apollo Health. This strategic move is expected to establish a leading integrated pharmacy distribution network, bolstered by a rapidly expanding omni-channel digital health business.
Morgan Stanley’s Insight on Apollo Hospitals
Morgan Stanley has reiterated its “Overweight” rating on Apollo Hospitals, with a target price of Rs. 7,181. The report attributes the 15% year-on-year growth in consolidated revenue for the fourth quarter to robust performances across its healthcare services, Apollo HealthCo, and AHLL divisions.
The consolidated EBITDA, after factoring in the costs associated with the 24×7 services, stood at Rs. 640 crore, aligning closely with Morgan Stanley’s projections. As of March 2024, Apollo Hospitals reported a consolidated net debt of Rs. 15,000 crore.
