Add Apollo Hospitals - Kotak

Positive outlook on margin. Apollo Hospitals delivered a 40 bps yoy EBITDA margin expansion during 1HFY13. The company remains optimistic on further improvement in EBITDA margin in FY2014E driven by – (1) capacity expansion in Chennai, (2) improved utilization in Hyderabad and Tier-II cities and (3) sustained momentum in the pharmacy business. Apollo is on course for a significant capacity expansion in healthcare services along with improved profitability across businesses.

We maintain ADD rating with increased TP at Rs820 (from Rs700) – based on 15X EV/EBITDA.

Source : Equity Bulls

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