IDEA2WIN - Buy: Apollo Hospitals

Buy - APOLLOHOSP

CMP (NSE) 15:54, 30 Jul

4,035.00 -3.75-0.09%

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Sector

Pharma/Healthcare

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Reco. Price

3,255

Period

12-Months

Target Price

3,940

upside

%

Stop Loss

0

Last updated on

10 Jun, 2021

Apollo Hospitals is an integrated healthcare provider, with services ranging from hospitals, retail pharmacies, health insurance, clinics, etc. The company is a pioneer in corporate hospitals and forms the largest chain in India with more than 10,200 beds across 71 hospitals. With more than 4,000 pharmacy outlets across the country, Apollo Pharmacy also forms the largest organized retail pharmacy chain in India. The company is on a massive expansion drive, wherein it has plans to expand its hospital presence in Tier I cities in addition to entering newer Tier II/III cities through its ‘REACH’ initiative

Investment Rationale

Capital raise to fuel growth

Apollo Hospitals recently concluded QIP of Rs11.7 bn of which Rs4.1 bn will be utilized for acquiring balance 50% stake in Apollo Gleneagles Hospital Kolkata, Rs1.4 bn will be invested in strengthening digital initiatives through Apollo 24/7, Rs1.5 bn towards diagnostics business and balance for any potential inorganic opportunity & reducing debt.

Through these investments management aims to achieve preventive healthcare (ProHealth) revenue of Rs10 bn in the next 3 years, from current Rs2.5 bn. It also aims to scale diagnostics revenues to Rs5 bn in next 3-4 years from current Rs1.6 bn.

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