Apollo Hospitals Q3 Results Review: Motilal Oswal Retains 'Buy', But Lowers Target Price — Here's Why

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Motilal Oswal Report

We cut our earnings estimates by 4%/5% for FY26/FY27, factoring in moderation in gross merchandise value for Apollo 24/7 and an increase in opex related to the commissioning of newer hospitals.

We value Apollo Hospital Enterprises Ltd. on an SOTP basis (32x EV/Ebitda for the hospital business, 15x EV/Ebitda for retained pharmacy, 23x EV/Ebitda for Apollo Health and Lifestyle Ltd., 22x EV/Ebitda for front-end Pharmacy, and 2x EV/sales for Apollo 24/7) to arrive at our target price of Rs 7,880.

We remain positive on Apollo Hospitals, aided by-

1. a steady improvement in occupancy of existing hospitals,

2. expanding total bed capacity through M&A/brownfield/greenfield routes,

3. enhancing offerings under Healthco, and

4. improving reach for the Apollo Health and Lifestyle business.

Accordingly, we model a 16% Ebitda CAGR over FY25-27. Reiterate Buy.

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