Apollo Hospitals In Focus As Incred Initiates Coverage With 'Buy' — Check Target Price

Apollo Hospitals shares will be in focus during Monday's trading session. Incred Equities has initiated coverage on Apollo Hospitals, giving it a 'Buy' rating. The domestic brokerage has set a target price of Rs 7,200 for Apollo Hospitals, which implies a 25% upside on the counter.

The initiation is driven by the company's strong performance across its business segments like hospitals, pharmacies, and digital health services. Here are the three key reasons behind the initiation on the stock:

The brokerage sees Apollo Hospitals as an advanced, technology-focused integrated healthcare provider. The company's diverse offerings, which include a digital pharmacy, diagnostics, and the Apollo 24/7 stores, cater to various patient needs.

Collaborations with tech giants like Google and Microsoft are enabling the implementation of artificial intelligence in diagnostics and robotics in surgeries, further cementing its leadership.

The company's plan to invest over Rs 80 billion to expand its bed capacity by 4,300 is seen as a key growth driver, with new hospitals expected to become profitable over the next two financial years.

Further, the changing disease profile in India, marked by a rise in lifestyle illnesses such as cardiovascular disease, diabetes, and cancer, presents a significant opportunity for Apollo Hospitals.

As the country's healthcare spending increases with rising disposable incomes and greater awareness, the demand for specialized care that the company can provide is expected to grow.

Medical tourism is identified as a good opportunity for Apollo, by InCred. Despite some headwinds from Bangladesh, the company's revenue from this segment is supported by its strong reputation and government initiatives like the "Heal in India" program and quick medical e-visas.

This positive momentum in medical tourism, paired with other advantages, provides a strong basis for the brokerage's initiation.