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Apollo Hospitals Q4FY24 review: Occupancy dips QoQ; margins to improve

Apollo Hospitals Enterprise Ltd. reported consolidated Ebitda of Rs 6.4 billion (up 31% YoY), in line with our estimates. Adjusted for 24×7 losses and ESOP cost (~Rs 1.5 billion), Ebitda was Rs 7.9 billion, up 12% YoY.

The recent stake sale in HealthCo to Advent and merger with Keimed are a positive step and will lead to an integrated pharmacy distribution business complemented by the fast-growing omni-channel digital health business.

Scale-up in Apollo HealthCo has been on track with likely breakeven in Ebitda of digital business over the next six-eight quarters. Further, the management guidance of Rs 17.5-20 billion Ebitda of the merged entity by FY27, provides comfort.

Our FY25E and FY26E Ebitda estimates broadly remain unchanged. Overall we estimate 18% Ebitda compound annual growth rate over FY24-26E (ex 24×7 losses).

We maintain ‘Buy’ rating with a target price of Rs 7,050/share. We ascribe 25 times enterprise value/Ebitda multiple to hospital and offline pharmacy, and assign one time sales to the 24/7 business.

For full Q4FY24 review, click. Prabhudas Lilladher

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