Brokerages remained divided on Apollo Hospitals Enterprise after its first-quarter results were released, with Citi and Morgan Stanley retaining positive ratings while Macquarie maintained its bearish stance.
Apollo Hospitals on Wednesday declared its Q1FY27 earnings. The consolidated net profit saw a 34.2% uptick to Rs 581 crore. The profit was at Rs 433 crore in the prior fiscal. The firm's revenue saw a 20.6% increase to Rs 7,044 crore as compared to Rs 5,842 crore in the year-ago period. Both profit and revenue were in line with analysts' estimates.
Here's what brokerages are saying:
Citi
Citi maintained its 'buy' rating on Apollo Hospitals with a target price of Rs 10,770. The current market price is Rs 8,567 and the revised target price implies a potential upside of about 25.7%.
The brokerage said Apollo delivered strong execution across businesses in the first quarter, with hospitals earnings before interest, taxes, depreciation, and amortisation rising 25% on a like-for-like basis. Despite ongoing expansion, return on capital employed remained strong at 28.5%, Citi said.
Apollo has announced four new hospitals and is now targeting the addition of more than 5,800 beds over the next five years. Citi said the expansion provides strong visibility on medium-term earnings growth and retained Apollo as its top India hospitals pick.
Macquarie
Macquarie maintained its 'underperform' rating with a target price of Rs 6,230, implying a potential downside of about 27.3% from the current market price of Rs 8,567. The brokerage described Apollo's first-quarter performance as an all-round beat, with the operational beat driven by revenue.
Morgan Stanley
Morgan Stanley maintained its 'overweight' rating with a target price of Rs 9,397, implying a potential upside of about 9.7%. The brokerage pointed out strong hospitals growth and said the digital business was nearing breakeven. It noted strong first-quarter execution across hospitals, pharmacy and diagnostics. Morgan Stanley said Apollo continues to balance growth and profitability, supported by hospital performance and improving digital economics.
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