Target: ₹9,036
CMP: ₹6,374.90
Apollo Hospitals Enterprise (APHS) Q3-FY25 EBITDA marginally missed BNPP/Bloomberg estimates by 2/3 per cent, owing to moderately lower- than-expected growth in the hospital segment. Hospitals/HealthCo/AHLL revenue grew 13/15/15 per cent y-o-y with 24.1 per cent EBITDA margin for the hospital segment.
Consolidated EBITDA came in at 13.8 per cent (vs BNPPe 13.8 per cent). The GMV of the digital health platform remained flat q-o-q at ₹760 crore. APHS highlighted that the ongoing India/Bangladesh issue impacted 1.5 per cent of hospital revenue and reaffirmed its ARPOB growth guidance of 6 per cent for FY26/27.
We remain upbeat on the Indian hospitals sector as we believe it offers multiple growth drivers, like improving occupancy of existing beds, annual growth in ARPOB and bed-count expansion. We view APHS as a strong player in this sector. We lower our FY25-27E EBITDA by 1 per cent as we tweak our growth assumptions for the hospital segment owing to fewer international patients from Bangladesh as a result of the ongoing conflict between two countries leading to issuance of fewer visas.
We keep our valuation parameters unchanged (incl. 29x FY27E target EV/EBITDA for the hospital segment and revise our TP to ₹9,036 (₹9,142 earlier).
