Feb'25 View on Apollo Hospitals Enterprise Ltd

Apollo Hospitals was established in 1983 by Dr. Prathap C Reddy, renowned architect of modern healthcare in India. As the nation’s first corporate hospital, Apollo Hospitals is acclaimed for pioneering the private healthcare revolution in the country. Apollo Hospitals has emerged as Asia’s foremost integrated healthcare services provider and has a robust presence across the healthcare ecosystem, including Hospitals, Pharmacies, Primary Care & Diagnostic Clinics and several Retail Health models. After falling from high of 7500, the stock is at its long term support level of 6250 and looks to scale past 7500 due to following positive inputs • Q3FY25 sales grew 14% yoy to Rs5530 cr, with EBITDA of Rs760 cr. • ARPOB growth was impressive at 8% yoy in Q3FY25. • We expect offline pharmacy growth to be healthy, aided by improving margins. • We continue to view the AHL-Keimed merger as a step in the right direction. • Expansion plans remain on track, as it is on course to add ~3,500 beds. • A fine Q3FY25, with healthy traction across hospitals, offline pharmacies & AHL. • Q3FY25 was 7 th consecutive quarter of sequential improvement in AHL’s margins. • Its overall bed expansion in FY25-27E is still much lower than almost all peers. • While we stay less sanguine on 24/7, continued sturdy offline FCF should address any concerns; Maintain BUY.