Home / Markets / Stock Markets12 to 4,124: Multibagger stock turns 1 lakh to 3.24 Cr in 23 years: Should you buy?
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A large-cap company with a market valuation of 59,481.56 crore, Apollo Hospitals Enterprise Ltd. operates in the healthcare industry. The leading supplier of integrated healthcare services in Asia, Apollo Hospitals has a huge foothold across the whole 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 spread throughout 73 hospitals, 4500+ pharmacies, more than 300 clinics, 1100 diagnostic centres, and 200 Telemedicine units with the finest available treatments for cancer, knee replacements, liver transplants, hearts, and much more. The shares of Apollo Hospitals Enterprise serve as one illustration of how long-term stock market investment may result in crorepati status.

Apollo Hospitals Enterprise Share Price History

The shares of Apollo Hospitals Enterprise Limited ended Friday's trading session on the NSE at 4,124.90 per share, a drop of 3.32% from the previous close of 4,266.65. The stock price climbed from 12.73 on January 1st, 1999 to the level it is at now, representing a multibagger return and an all-time high of 32,302.99%. This indicates that if you had invested 1 lakh in Apollo Hospitals Enterprise Ltd shares 23 years ago, it would currently be worth almost 3.24 crore. 

The stock price went up from 1090.55 on September 1, 2017, to the level it is at now during the past five years, resulting in a multibagger return of 278.24% and an approximate CAGR of 30.49%. The stock has dropped 13.04% over the past year, and on a year-to-date basis, it has fallen 17.34% so far in 2022. On the NSE the stock has touched a 52-week-high of 5,935.40 on (26-November-21) and a 52-week-low of 3,361.55 on (26-MAY-22) which indicates that at the current market price the stock is trading 30.50% below the high and 22.70% above the low.

Apollo Hospitals Enterprise Q1FY23 Results

For Q1FY23, the company reported a profit after tax (PAT) or a net profit of 317.10 Cr compared to 489.30 Cr in Q1FY22 a YoY fall 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 which was 3,784.85 in Q1FY22. In Q1FY23 the company reported a total expense of 3,545.36 Cr on a consolidated basis which was 3,475.58 Cr in the same quarter last year. In Q1FY23 the company's profit before tax (PBT) reached 254.28 crore, a YoY fall of 57.6% from 599.23 crore in Q1 FY22.

Should you buy the shares of Apollo Hospitals Enterprise?

Following the Q1FY23 performance of Apollo Hospitals Enterprise, the research analysts of the broking firm Prabhudas Lilladher said “Apollo hospitals enterprises (APHS) consolidated EBITDA decline by 6% to Rs4.9bn, in line with our estimate. Adjusted for 24x7 losses, EBITDA was up 12% YoY. Hospital profitability recovered QoQ with 19% EBITDA growth while losses from 24x7 remain at elevated levels. EBITDA from offline pharmacy (SAP) and AHLL decline by 3% and 39% YoY given high base. Overall occupancy stood at 60% vs 58% in Q4. ARPOB remain healthy at Rs.51K; up 7% QoQ aided by reduction in ALOS and payor mix. Net debt reduced by 2.1bn QoQ to 9bn."

“APHS pursued aggressive expansion in past few years which has created a strong growth platform. APHS digital foray makes it a strong Omni - channel play and given strong presence in offline format makes the company more formidable player than pure play online companies. Though stake sale in Apollo HealthCo has been delayed; scale up in business is one track. We estimate 20% EBITDA CAGR over FY22-24E. Our FY23E EBITDA stands reduced by 5% as we factor in higher losses from 24x7 however our FY24E EBTDA remain unchanged. We value APHS on an SOTP basis. We ascribe 22x EV/EBITDA multiple to the hospital segment, 25x EV/EBITDA to offline pharmacy and 20x EV/EBITDA to AHLL. We ascribe zero value to the 24/7 business and arrive at a price target of Rs5,000. Recommend BUY rating," said the research analysts of the broking firm Prabhudas Lilladher.

The research analysts of the broking firm Motilal Oswal have said “We reduce our FY23 EBITDA estimate for APHS by 6%, factoring in: a) a higher operating cost for Pharmacy as well as the Apollo Health & Lifestyle (AHLL) segment. We continue to value 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 on account of: a) a robust growth outlook in the Hospital segment, b) strong foundation build-up for the Online Pharmacy segment, and c) the addition of healthcare services through AHLL. We maintain our Buy rating."

The research analysts of the broking firm ICICI Securities have said “We maintain BUY due to 1) pick-up in elective surgeries and margins at hospitals to improve through better operating leverage and optimisation of payer and case mix, 2) impending value unlocking through Apollo HealthCo and 3) increase in reach for all verticals through integrated digital platform to be remunerative in long term albeit with front-loaded cost pressure. We value Apollo at 5080 based on SOTP valuation."

1. Apollo is undergoing optical transformational journey towards creating an omni-channel healthcare platform that could set the platform for tapping new-age investors enabling rapid scale up of the digital healthcare platform, 2. Business normalisation in healthcare is expected to continue with further momentum due to lifting of travel restrictions, international patients. Also with strong healthcare pedigree & asset base, the company is on course to integrate all entities digitally to leverage its brand and physical presence, 3. The new hospitals, ventures are turning profitable on the back of a judicious case mix besides better occupancy & ramp up at new hospitals and AHLL, are the key triggers for future price action of Apollo Hospitals Enterprise said the research analysts of the broking firm ICICI Securities.

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

ABOUT THE AUTHOR

Vipul Das

Vipul Das is a Digital Business Content Producer at Livemint. He previously worked for Goodreturns.in (OneIndia News) and has over 5 years of expertise in the finance and business sector. Stocks, mutual funds, personal finance, tax, and banking are among his specialties, and he is a professional in industry research and business reporting. He received his bachelor's degree from Dr. CV Raman University and also have completed Diploma in Journalism and Mass Communication (DJMC).
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