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₹12 to ₹4,124: Multibagger stock turns ₹1 lakh to ₹3.24 Cr in 23 years: Should you buy?

A large-cap company with a market value of 59,481.56 crore, Apollo Hospitals Enterprise Ltd. is active in healthcare. Apollo Hospitals, the leading provider of integrated healthcare services in Asia, has a huge footprint across the healthcare ecosystem, including hospitals, pharmacies, primary care and diagnostic clinics, and a number of retail health models. Apollo’s footprint includes more than 10,000 beds across 73 hospitals, 4,500+ pharmacies, more than 300 clinics, 1,100 diagnostic centers and 200 telemedicine units offering the best available treatments for cancer, knee replacements, liver transplants, hearts and much more. The stock of Apollo Hospitals Enterprise serves as an illustration of how long-term investments in the stock market can result in crorepati status.

Apollo Hospitals Enterprise Stock Price History

Shares of Apollo Hospitals Enterprise Limited ended Friday’s trading session on the NSE at 4,124.90 per share, down 3.32% from the previous close of 4,266.65. The share price climbed from 12.73 on January 1, 1999 to where it is today, representing a multi-dredging yield and a record high of 32,302.99%. This indicates that if you had invested 1 lakh in Apollo Hospitals Enterprise Ltd stock 23 years ago, would be almost worth it today 3.24 crores.

The share price rose from 1090.55 on September 1, 2017, to the level it has now for the past five years, resulting in a multi-dredging return of 278.24% and an estimated CAGR of 30.49%. The stock has fallen 13.04% in the past year and is down 17.34% year-on-year so far in 2022. On the NSE, the stock has hit a 52-week high of 5,935.40 at (November 26-21) and a 52-week low of 3,361.55 on (26-MAY-22), indicating that the stock is trading 30.50% below the high and 22.70% above the low at the current market price.

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Apollo Hospitals Enterprise Q1FY23 results

For Q1FY23, the company reported an after-tax profit (PAT) or net profit of 317.10 Cr compared to 489.30 Cr in Q1FY22 a year-on-year decline of 35.19%. On a consolidated basis, the company reported revenue from operations of 3,795.60 Cr in Q1FY23 compared to 3,760.21 Cr in Q1FY22. On a consolidated basis, the company’s total income reached 3,811.66 Cr in Q1FY23 what was 3,784.85 in Q1FY22. In Q1FY23, the company reported a total spend of 3,545.36 Cr on a consolidated basis what was 3,475.58 Cr in the same quarter last year. In Q1FY23, the company’s pre-tax profit (PBT) reached 254.28 crore, down 57.6% year-on-year from 599.23 crore in Q1 FY22.

Should You Buy Apollo Hospitals Enterprise Shares?

Following Apollo Hospitals Enterprise’s Q1FY23 performance, brokerage firm Prabhudas Lilladher’s research analysts said: “Apollo Hospitals Enterprises (APHS) consolidated EBITDA decline by 6% to Rs 4.9 billion, in line with our estimate. Adjusted for 24×7 losses, EBITDA increased 12% year-over-year Hospital profitability recovered with 19% quarter-on-quarter EBITDA growth, while 24×7 losses remain high. Offline pharmacy (SAP) and AHLL EBITDA down 3% and 39% yoy given the high base. Total occupancy was 60% vs. 58% in Q4. ARPOB remains healthy at Rs.51K; 7% QoQ increase aided by reduction in ALOS and payer mix. Net debt reduced by 2.1 billion QoQ to 9 billion.”

“APHS has pursued an aggressive expansion in recent years, creating a strong growth platform. APHS’s digital foray makes it a strong omni-channel game and its strong presence in offline format makes it a more formidable player than pure online companies. Although the sale of shares in Apollo HealthCo has slowed down; scaling up in business is one track. We estimate 20% EBITDA CAGR over FY22-24E. Our FY23E EBITDA was down 5% as we factor in higher losses of 24×7, but our FY24E EBTDA remains unchanged. We value APHS on a SOTP basis. We assign 22x EV/EBITDA multiple to the hospital segment, 25x EV/EBITDA to offline pharmacy and 20x EV/EBITDA to AHLL. We assign zero value to the 24/7 business and arrive at a price target of Rs 5,000. Recommend BUY rating,” said Prabhudas Lilladher brokerage research analysts.

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The research analysts at the brokerage Motilal Oswal said: “We are reducing our FY23 EBITDA estimate for APHS by 6%, taking into account: a) higher operating expenses for Pharmacy and the Apollo Health & Lifestyle (AHLL) segment. We continue to appreciate APHS on a SoTP basis (22x EV/EBITDA for the hospital segment, 30x EV/EBITDA for the pharmacy and AHLL segment and 4x EV/sales for Apollo 24/7) to arrive at our TP of INR5110. We remain positive on APHS due to: a) strong growth prospects in the hospital segment, b) strong foundation building for the online pharmacy segment, and c) the addition of health services through AHLL. We maintain our buy recommendation.”

The research analysts at the brokerage firm ICICI Securities said: “We are maintaining KOOP due to 1) uptick in elective operations and margins in hospitals to improve through better operating leverage and optimization of payer and case mix, 2) looming value unlocking through Apollo HealthCo and 3 ) extending reach for all verticals through an integrated digital platform to pay off in the long run, albeit with high cost pressure. 5080 based on SOTP rating.”

1. Apollo is undergoing an optical transformation journey to create an omni-channel healthcare platform that could provide the platform for tapping into new age investors, enabling rapid scale-up of the digital healthcare platform, 2. Normalizing business operations in healthcare is expected to increase further due to the lifting of travel restrictions, international patients. Also with a strong healthcare and asset base, the company is on track to digitally integrate all entities to leverage its brand and physical presence. hospitals and AHLL, are key triggers for future Apollo Hospitals Enterprise price action, according to research analysts at brokerage firm ICICI Securities.

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Disclaimer: The views and recommendations made above are those of individual analysts or brokerage firms, not Mint.

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