UBS Hikes Target Price On Apollo Hospitals, Sees Around 20% Upside

UBS maintained its bullish stance on Apollo Hospitals and hiked its target price on the scrip as the global brokerage firm believes the company is a candidate for rerating.

What Happened: UBS maintained its "buy" call on the company and raised the target price to ₹7,500 from ₹7,300. The research firm sees the company as a candidate for rerating as it expects the hospital company to have an EBITDA compound annual growth rate of 16% over FY24-28 due to more beds, higher average revenue per operating bed and occupation. 

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According to the brokerage, the implied valuation of the hospital segment is 19 times the enterprise value (EV)/EBITDA compared to its peers which were rerated from 20 times to 26 times EV/EBITDA in the past 6 months. 

The continued reduction in discounts by Apollo 24/7, the digital healthcare platform should help reduce its losses, said the brokerage. The research firm believes the decent growth visibility for the company makes the hospital major a strong candidate for re-rating. 

Price Action: Shares of Apollo Hospitals gained 0.22% to ₹6,250.25 on Wednesday morning.

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