NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Apollo Hospitals Enterprises Ltd. has proposed to infuse equity capital (Rs 24.8 billion) from Advent international at Apollo HealthCo level and integrate Keimed Pvt. Ltd (distribution arm of Apollo group) with Apollo HealthCo.
The deal values Apollo HealthCo at Rs 145 billion ($1.8 billion) at an expected valuation of enterprise value/sales of 1.9 times. Keimed is valued at Rs 80 billion (23 times FY24E Ebitda of Rs 3.5 billion).
The deal establishes a strong pharmacy franchise that spans the entire value chain from distribution to direct and online customer engagement. This expansion not only increases scale but also boosts efficiency throughout the value chain, leading to enhanced profitability.
Apollo Hospitals has been expanding across the healthcare services comprising hospitals and both offline and online pharmacy businesses. Overall, we expect 48% earnings compound annual growth rate over FY24-26.
We value Apollo Hospitals on an SOTP basis (26 times enterprise value/Ebitda for hospitals, 12 times EV/Ebitda for retained pharmacy, 20 times EV/Ebitda for front-end pharmacy, 25 times EV/Ebitda for Apollo Health and Lifestyle Ltd. and two times EV/sales for Apollo 24/7) to arrive at a target price of Rs 7,280. Maintain Buy.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
