Brokerage firm Citi has assigned a BUY rating to Apollo Hospitals Enterprise Limited with a target price of Rs 9,600, implying a potential upside of 33 percent from the current market price. The brokerage cited b third-quarter earnings, improved margins and attractive valuation as the basis for its outlook.
Indian equity markets opened flat on Wednesday, 11 February, with gains in Reliance Industries and auto sector stocks supporting indices, while selling pressure in realty and public sector banking stocks weighed on sentiment. Amid market volatility and mixed global cues, Citi said Apollo Hospitals is trading at favourable valuations.
Citi Assigns BUY Rating and Rs 9,600 Target
Citi has set a target price of Rs 9,600 for Apollo Hospitals Enterprise Limited. The company’s shares closed at Rs 7,220 on Tuesday. Based on this closing price, the brokerage sees a potential upside of approximately 33 percent.
According to Citi, the stock is trading below its historical average valuation levels, making the current pricing attractive.
Third-Quarter Performance
Citi’s report stated that Apollo Hospitals delivered b operational performance in the third quarter. The company reported revenue of around Rs 6,500 crore in Q3, while earnings before EBITDA reached Rs 970 crore.
These figures represent year-on-year growth of 17 percent in revenue and 27 percent in earnings before EBITDA.
Hospital Business Drives Growth
The core hospital business remained the primary growth driver. Revenue from the hospital segment increased 15 percent year-on-year during the third quarter.
Despite adding new capacity, the company maintained profitability. Hospital segment margins improved by 60 basis points to 24.5 percent.
Apollo HealthCo and 24/7 Platform
Apollo HealthCo also supported overall performance. Expenses on the Apollo 24/7 platform declined 12 percent year-on-year.
As a result, Apollo HealthCo margins improved by approximately 210 basis points.
Valuation and Business Position
Citi stated that Apollo Hospitals is trading below its previous valuation levels while maintaining a stable balance sheet and clear long-term growth visibility.
Share Performance
Over the past one month, the stock has risen around 5 percent. It remained nearly flat over three and six months. On a one-year basis, the stock has delivered approximately 20 percent returns.
Over two years, the stock has gained 18 percent, and over three years it has risen about 72 percent.
52-Week Range and Market Capitalisation
Apollo Hospitals’ 52-week high stands at Rs 8,099 and its 52-week low at Rs 6,002.15. The current price is between these levels.
On the BSE, the company’s market capitalisation is approximately Rs 1,08,899 crore.
