Apollo Hospitals’ stock saw a 5% increase in value by the end of the day, closing at approximately ₹5,153, following the initiation of coverage by renowned brokerages Morgan Stanley and BofA.
Morgan Stanley has a target price of ₹6,101 and is “overweight” in the stock. According to their analysis, there will be a strong 31% compound annual growth rate (CAGR) in EBITDA (earnings before interest, tax, depreciation, and amortization) between FY24 and FY26. By FY26, they estimate the return on capital to be about 21%.
The major growth drivers, according to Morgan Stanley, will be a significant 18% CAGR increase in hospital services EBITDA between FY24 and FY26. They also expect the losses from their 24/7 e-healthcare services to narrow and approach breakeven by FY26.
BofA Securities began covering the stock with a ₹6,000 target price and a “buy” rating. They see Apollo Hospitals as a one-stop shop for healthcare needs.
They view the hospital and Healthco’s earnings momentum from breaking even as important growth drivers.
According to a note from BofA, current valuations are trading at a premium compared to the five-year averages, and the note also highlighted the possibility of a revaluation based on Healthco’s growth prospects and Apollo’s omnichannel arm.
The premium is indicative of enhanced margin visibility and a strengthened balance sheet, offering robust backing for upcoming expansion initiatives.
Apollo Hospitals’ stock hasn’t changed in value in the last month.
