Apollo Hospitals rallies 20% in 4 days on strong Q2; stock hits new high

Shares of Apollo Hospitals Enterprises (AHEL) continued at their upward march, with the stock hitting a fresh record high of Rs 5,460 on the BSE on Wednesday. They rallied 7 per cent in today's intra-day trade and have surged 20 per cent in the past four days after the company reported a strong set of numbers for the quarter ended September 2021 (Q2FY22). In comparison, the S&P BSE Sensex was down 0.2 per cent during the same period.

The Q2FY22 performance of AHEL was better-than-expected with a rise in the average revenue per occupied bed (ARPOB) and a lower average length of stay (ALOS). The company also acquired a 65 per cent stake in the 180-bed Excelcare Hospital in Guwahati at an enterprise value of Rs 210 crore, and is seeking to acquire a 300-bed facility in Mumbai in the next few years and 300 more beds in Bengaluru by acquisition in the next two years.

Apollo is one of the leading integrated healthcare service providers with avenues like hospitals, pharmacies, primary care & diagnostic clinics. The group has capacity of 10,231 beds across 71 hospitals in India with a total of 8,858 beds owned in 44 hospitals; 278 beds in 11 cradles; 244 beds in 11 day-care/short surgical stay centres; 851 beds in five hospitals under O&M contracts.

ICICI Securities has a 'buy' rating on Apollo with a target price of Rs 5,930 per share. "Apollo is undergoing optical transformational journey towards creating an omni-channel healthcare platform that could set the platform for tapping new-age investors enabling rapid scale up of the digital healthcare platform," the brokerage firm said in result update.

The business normalisation in healthcare is expected to continue with further momentum due to lifting of travel restrictions, international patients. Also with strong healthcare pedigree & asset base, the company is on course to integrate all entities digitally to leverage its brand and physical presence. The new hospitals, ventures are turning profitable on the back of a judicious case mix besides better occupancy & ramp up at new hospitals and AHLL, it added.

Apollo Hospitals