Broker’s call: Apollo Hospitals (Outperform)

Target: ₹8,723

CMP: ₹6,893.50

Apollo Hospitals Enterprise’s (APHS) Q4-FY25 EBITDA marginally missed consensus by 2 per cent but was in line with our estimate.

Hospitals/HealthCo/AHLL revenue grew 10/17/11 per cent y-o-y with 24.3 per cent EBITDA margin for the hospital segment. Consolidated EBITDA margin came in at 13.8 per cent (BNPPEe: 13.5 per cent).

APHS highlighted that ongoing India-Bangladesh tensions impacted patient volumes by 2 percentage points in Q4-FY25.

We assign a target FY27E EV/EBITDA of 29x to the hospital segment, which is at a 20 per cent premium to the average valuation of other listed pure-play hospital companies, considering APHS is the largest Indian hospital group with a pan-India presence and brand equity, while others are largely regional players. To factor in the planned merger between Apollo HealthCo (AHL) and Keimed in FY27, we assign a target FY27E EV/EBITDA multiple of 15x to value the Apollo HealthCo-Keimed merged entity. We value APHS’ stake in Indraprastha Medical (listed) at market value.

Upside risks: Newly installed beds breaking even earlier than expected, resulting in earnings exceeding our forecasts. Downside risks: longer-than-expected gestation period for installing new beds that are planned in the near term; a delay in the improvement of occupancy ratio and ARPOB for the hospital segment; and a delay in the ramp-up of the Apollo 24/7 arm.

Published on June 2, 2025