APOLLO HOS­PI­TALS

Flash News Investment - - RECOMMENDATIONS -

The com­pany mainly op­er­ates through two seg­ments, i.e. health­care ser­vices and phar­macy, which con­trib­ute 55 per cent and 40 per cent, re­spec­tively, to­wards its to­tal rev­enue. Over the last five years, the health­care seg­ment grew by 13 per cent CAGR and the phar­macy seg­ment by 24 per cent CAGR. It has added new hos­pi­tals in Tamil Nadu, Andhra Pradesh and Te­lan­gana, which would drive its rev­enue in the near term. Also, its num­ber of phar­macy stores have touched 3085, of which 64 stores were added in Q1FY19. The ris­ing rev­enue from the ex­ist­ing stores have added to the growth of this seg­ment. The man­age­ment has as­sured com­ple­tion of capex and it is op­ti­mistic about im­prove­ment in mar­gins. In Q1FY19, the com­pany de­liv­ered ro­bust growth in topline and prof­its on QoQ and YoY ba­sis. Con­sid­er­ing these fac­tors, we rec­om­mend it as a BUY.

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