Hold Apollo Hospitals ; target of Rs 990: ICICI Direct
ICICI Direct’s research report on Apollo Hospitals
Standalone revenues grew 12.1% YoY to | 1863 crore (I-direct estimate: | 1908 crore) on the back of 16.1% YoY increase in pharmacy business to | 863 crore (I-direct estimate: | 879 crore) and 8.9% YoY increase in healthcare business to | 1000 crore (I-direct estimate: | 1029 crore) EBITDA margins improved 123 bps YoY to 11.5% (I-direct estimate: 11.2%) mainly due to lower base of Q4FY17. EBITDA increased 26% YoY at | 214 crore (I-direct estimate: | 213 crore)
We value the stock on an SOTP basis by valuing the healthcare business (existing hospitals & JV) at 12x FY20E EV/EBITDA, healthcare business (new hospitals) at 0.8x and FY20E pharmacy business at 1.0x FY20E EV/sales. We ascribe a target price of | 990.
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