Apollo Hospitals - Another quarter of 20% growth - AXIS Capital

Apollo Hospitals (Apollo) grew ~ 20% YoY for yet another quarter (over 30 quarters of 20% YoY growth). While hospitals continue to show higher occupancy levels and rising average revenue per occupied bed led by better case mix, improvement in profitability of pharmacies is being driven by higher proportion of (1) matured stores and (2) in-house brands in sales mix.

With expansion of hospital beds coupled with yearly addition of 200 pharmacies, we expect Apollo to sustain 20% revenue CAGR over FY15. Maintain FY13E EPS at Rs 22 and FY14E EPS at Rs 28 and introduce FY15E EPS at Rs 35. Our SOTPbased TP stands at Rs 901 (refer page 2). Downgrade to HOLD given 7% upside from CMP.

Source : Equity Bulls

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