Apollo Hospitals Stocks Touch Fresh High after its Q1 Results; Analysts Increase Price Targets

5 August 2022
3 mins read
Apollo Hospitals Stocks Touch Fresh High after its Q1 Results; Analysts Increase Price Targets

Apollo Hospitals share price soared as much as 6.5% as of 12 pm on 16 August 2021, Monday, as analysts raised the price targets on the company. It clocked a consolidated PAT (profit after tax) of Rs. 489 crores for Q1 of FY2021-22.

The leading hospital chain saw a massive 31% jump in its revenue which stood at Rs. 3,760.2 crores in Q1.

Highlights of Apollo Hospitals Q1 Results

To have a better understanding of Apollo’s financial performance this year so far, let’s take a quick look at the Q1 highlights:

  • EBITDA is up by 26% to Rs. 519.9 crores as opposed to a forecast of Rs. 434.9 crores.
  • The net profit of the company stands at Rs. 489.3 crores against analyst estimation of Rs. 165.7 crores. This is a staggering 191% increase.
  • The margin stands at 13.8% versus 14.4% as compared to the predicted 14% metric.
  • The collected revenue of its healthcare services division jumped 15% and stood at Rs. 1,482.7 crores.

What are the Global Analysts Saying?

As many as 24 global analysts have been tracking Apollo Hospitals stocks. Of them, 21 have provided a ‘buy’ rating, while one each has recommended a ‘hold’ and a ‘sell’ rating.

Let’s take a detailed look at what some of the major global analysts have made out of Apollo’s Q1 results.

CLSA

A global research firm, CLSA, has upgraded Apollo stocks from ‘sell’ to ‘outperform’. Moreover, it has also raised the price target from Rs. 2,900 per share to Rs. 4,420 each share. It said that the hospital chain had registered robust Q1 profits despite higher-than-expected Covid services contribution.

It further adds that the Covid-related services contributed to boosting the company profit and its EBITDA. CLSA has increased its EBITDA forecast for FY 2021-22 by 8-13%. While a big valuation surprise would be necessary to boost a significant upside, value unlocking for Apollo’s online healthcare technology platform is just on the right track.

Credit Suisse

Another global brokerage, Credit Suisse, has provided the ‘outperform’ rating for Apollo stocks. It has hiked the price targets from Rs. 3,850 to Rs. 4,800 for each share. It believes that Apollo’s strategy to combine financial and strategic partners will increase the number of new customers significantly.

It adds that there could be a rise in offline pharmacy EBITDA by over 40% through ramping up generic medicine. The prospect of diagnostic expansion seems to be quite robust.

Morgan Stanley

Morgan Stanley has maintained an ‘overweight’ stance for Apollo Hospitals. It has moved up its price targets for the company to Rs. 4,734 per share from Rs. 3,602. This hints at an upside of 17%.

It is of the opinion that resumption of travels will further help in business volume recovery. A robust pharmacy chain along with online delivery of medicines to more than 16,000 PIN codes will develop its omnichannel platform. Morgan Stanley believes Apollo’s recovery of the core business, along with a decent performance of the health tech platform, is responsible for significant Q1 results.

Wrapping Up

Apollo stocks touched a record 52-week high on 16 August Monday and traded at Rs. 4,319.90 per share. The intraday high stood at Rs. 4,319.90 while the intraday low was at Rs. 4,139.45.

For more of such interesting titbits about the financial world, take a look through the Angel One blogs.

 

Frequently Asked Questions

  1. What led to strong Q1 gains for Apollo Hospitals?

Recovery in the core hospital business, pharmacy business and online healthcare platform named Apollo 24×7 contributed to strong Q1 gains for Apollo.

  1. How many active users has Apollo 24×7 registered?

Apollo 24×7 has 20 lakh active users with over 1 crore subscriptions as of March 2021.

  1. What is Apollo 24×7?

Apollo 24×7 is the hospital chain’s omnichannel health care platform.