Shares Of This Hospital Stock Could Surge: Motilal Oswal

Broking firm, Motilal Oswal has a buy call on the stock of Apollo Hospital with a price target of Rs 5600 on the stock, as against the current market price of Rs 4323, which leaves significant potential for an upside.

Apollo Hospitals Enterprise: Net debt falling

According to Motilal Oswal, Apollo Hospitals Enterprise has delivered a phenomenal performance (3.6x earnings) over the past five years, reporting a 24% EBITDA CAGR and reducing net debt by half, benefiting from a lower tax rate. "Interestingly, over FY23-25E, the outlook on operational parameters for healthcare services also remains promising (17% EBITDA CAGR) on the back of superior execution of Apollo Hospitals Enterprise and favorable macro factors," the brokerage has said.

Pharmacy business encouraging

According to the brokerage, the pharmacy outlook is encouraging, too, with the aggressive expansion of offline/online infrastructure and the ability of the company to provide the entire spectrum of healthcare services to its customers.

Buy with a price target of Rs 5600

"We have a BUY rating on Apollo Hospitals Enterprise with a price target of Rs 5,600 valued on the SOTP basis (23x EV/EBITDA for hospital business, 16x EV/EBITDA for back-end pharmacy, 22x EV/EBITDA for front-end pharmacy, 30x EV/EBITDA for Apollo Health and Lifestyle (AHLL), and 4x EV/sales for Apollo 24/7)," the brokerage has said.