Apollo Hospitals is working on the recalibrated cost structure for Apollo 24/7 and subsequently would indicate the growth prospects in this segment. Rs 9 billion-Rs 10 billion quarterly GMV would enable Ebitda to break even in Apollo 24/7.
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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-
a steady improvement in occupancy of existing hospitals,
expanding total bed capacity through M&A/brownfield/greenfield routes,
enhancing offerings under Healthco, and
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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