Why Brokerages Are Mixed On Apollo Hospitals Despite Delivering Strong Results

Apollo Hospitals shares gained on Friday morning after reporting March quarter results that met expectations. 

What Happened: Apollo Hospitals in its March results reported its net profit increase of 77.47% to ₹258.4 crore. The company's revenue gained 14.91% to ₹4943.9 crore compared to ₹4302.2 crore in the corresponding quarter in the previous year. The company said the healthcare services revenue grew by 17%, Apollo Health & Lifestyle (AHLL) jumped by 15% and Apollo Health Co rose by 13%. EBITDA grew 31% to ₹640.5 crore. 

The company also declared a dividend of  ₹10 per share. 

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Brokerage Views: Morgan Stanley maintained its "overweight" call with a target price of ₹7181. The Q4 revenue growth was driven by healthcare services, Apollo Health Co and AHLL. The consolidated EBITDA after 24*7 operating cost was ₹640 crore. The company had a consolidated net debt of ₹15,000 crore by the end of March 2024. 

Macquarie reiterated its "underperform" with a target price of ₹4200. According to the brokerage, while the Q4 results were operationally in line, the hospital’s profitability declined. Profit miss was driven by higher depreciation and amortization expenses. While the Hospital business EBITDA margin compressed 130 bps Year on Year and 70 bps Quarter on Quarter to 23.1%. 

Price Action: Shares of Apollo Hospitals gained 2.54% to ₹5,913.05 on Friday morning. 

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Posted In: EarningsEquitiesNewsPrice TargetReiterationMarketsAnalyst RatingsMoversApollo Hospitals