Emerging as the largest Indian private hospital player, the share price of Apollo Hospitals has rallied over 300 percent in the last 10 years. The company is also a market leader in the private healthcare space operating a chain of 70 hospitals and over 2,300 pharmacies.

Share Market Live

NSE

The stock has risen as much as 334 percent in the last 10 years, rising from around Rs 343 in 2010 to Rs 1,490 currently. The stock hit its 52-week high of Rs 1,574.90 on September 12, 2019, and a 52-week low of Rs 1,083 on February 18, 2019. In the last one year, the stock added over 15 percent.

According to analysts, the company's market leadership is driven by strong brand equity and a superior quality of service. They expect further upside in the stock going ahead.

HDFC Securities expect the stock to double in the next 3 years. As per the brokerage, the company continues to maintain its healthy revenue growth while increasing its capacity and maintaining steady operating profitability. The company's liquidity profile is expected to improve in near to medium term on account of healthy operating profitability, reduced Capex intensity and increased fund flow from identified asset monetisation plans, it added.

However. regulatory risk, project execution risk, higher competition, discontinuance of leases, and high debt are key concerns, the brokerage explains. But on the bright side, the company's recent announcements of transfer of front-end retail pharmacy business to a separate entity and sale of investment in Apollo Munich by the group is expected to reduce debt levels.

IDFC Securities also supports the view. As per IDFC Securities, Apollo is a strong EM healthcare model with its leadership position, national footprint, and a multi-pronged healthcare delivery model. Its recently concluded big-ticket expansion has created a strong growth platform and post a long weak earnings phase, earnings recovery is visible from the last 8 quarters now, it added.

Apollo Hospitals reported a 15 percent growth in standalone net profit for the second quarter at Rs 91 crore. The company posted a net profit of Rs 79 crore for the same period last year.

The standalone revenue from the operations of the hospital grew by 18 percent to Rs 2,464 crore for the September quarter as against Rs 2,090 crore recorded a year earlier. The strong growth in revenue was aided by a 15 percent growth in healthcare services and 22 percent growth in standalone pharmacies business.