Shares of hospital chain Apollo Hospitals Enterprise have outperformed the benchmark index, notching more than 100% gain over the past one year, as compared to 23.5% gain in the BSE Sensex, which gauges the performance of the top 30 largecap stocks. The surge in stock price was attributed to strong financial performance and recovery in business following a drop in the Covid-19 infection rate.
Apollo Hospitals, a known brand in the Indian healthcare segment, has delivered consistent returns to long-term investors, doubling shareholders' money in just one year. The largecap stock has delivered as much as 104% returns in the last one year, with its share price surging to ₹4,941 on January 4, 2022, from ₹2,409 on the same day last year, even as occupancy of healthcare services dropped on account of Covid-19-led lockdown. Simply put, ₹1 lakh invested in this private sector healthcare stock at the beginning of last year would have now turned more than ₹2 lakh at present.
How Apollo Hospitals shares have fared so far
With a market capitalisation of more than ₹71,200 crore, the multibagger stock has rallied over 310% in the past five years. The stock price has climbed 32% in the last six months, while it dropped 7% over the past one month. Apollo Hospitals’ shares have gained 1% over the last five sessions, while it slipped more than 1% over the past two sessions. The stock has gained 102% from its 52-week low of ₹2,386.25 recorded on January 5, 2021. The share had hit a 52-week high of ₹5,930.70 on November 26, 2021.
On Tuesday, the stock opened marginally higher at ₹5,019 against the previous close price of ₹4,988.90. In the early trade, the stock declined as much as 0.95% to hit a low of ₹4,941.55. Despite today’s fall, the scrip was trading higher than 5-day, 50-day, 100-day and 200-day moving averages, but lower than the 20-day moving average, according to stock research platform Markets Mojo.
As per the research platform, the stock was trading at a discount compared to its average historical valuations due to drop in investor participation. The delivery volume, the quantity of the stock delivered to the actual buyer out of the total traded volume, declined by 20.3% to 1.2 lakh on January 3, as compared to 5-day average volume.
Brokerages assign ‘Buy’ rating to Apollo Hospitals shares
Last month, brokerage firms Motilal Oswal and ICICI Direct had assigned ‘Buy’ ratings to the stock, owing to strong operational and financial performance in the September quarter. Analysts at Motilal Oswal had assigned a ‘Buy’ call on Apollo Hospitals with a target price of ₹5,900 in its research report dated December 21, 2021. ICICI Direct had also recommended a buy rating with a target price of ₹6,045 in its report. The stock currently trades at ₹4,941.55 apiece as of January 4, 20201.
“Considering the multiple growth levers in place to drive its business, we expect Apollo Hospitals Enterprise’s (AHEL) revenue to grow at CAGR of 16% and earnings to grow at CAGR of 30% over FY22-24 to ₹19,200 crore and ₹1,600 crore, respectively. We initiate coverage on AHEL with an SOTP-based target price of ₹5,900 and a Buy rating,” Motilal Oswal said in its report.
Apollo Hospitals reports positive results for last four quarters
Apollo Hospitals Enterprise, operating in the hospitals and allied services sector, has reported positive results for the last four consecutive quarters amid a recovery in hospital business. The multinational hospital chain posted better-than-expected earnings during the second quarter ended September 30, 2021, driven by strong revenue growth and margin expansion.
In Q2 FY22, the company reported a 311% jump in consolidated net profit to ₹247.8 crore, from ₹60.27 crore in Q2 FY21. Consolidated net sales rose 34.6% to ₹3,717 crore in September quarter of 2022, from ₹2,760.72 crore in the year ago period. Profit before tax surged 483% to ₹382.99 crore as compared to ₹65.60 crore in the same period last year. The earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed 105.1% year-on-year to ₹615 crore, while EBITDA margin grew by 568 basis points to 16.5% in Q2 FY22.