₹12 to ₹4,124: Multibagger Stock Goes From ₹1 Lakh to ₹3.24 Cr in 23 Years: Should You Buy?

A large cap company with a market valuation of 59,481.56 crores, Apollo Hospitals Enterprise Ltd. operates in the healthcare sector. Asia’s leading provider of integrated healthcare services, Apollo Hospitals has a significant presence across the entire healthcare ecosystem, including hospitals, pharmacies, primary care and diagnostic clinics, and a number of retail health models. Apollo’s footprint includes more than 10,000 beds in 73 hospitals, more than 4,500 pharmacies, more than 300 clinics, 1,100 diagnostic centers and 200 telemedicine units with the best treatments available for cancer, joint replacements knee, liver transplants, hearts and more. Apollo Hospitals Enterprise shares illustrate how a long-term stock market investment can lead to crorepati status.

Apollo Hospitals Enterprise Share Price History

Shares of Apollo Hospitals Enterprise Limited ended Friday’s trading session on the NSE at 4,124.90 per share, a decrease of 3.32% compared to the previous close of 4,266.65. The share price went from 12.73 on January 1, 1999 at the current level, which is a multibagger yield and an all-time high of 32,302.99%. This indicates that if you had invested 1 lakh in Apollo Hospitals Enterprise Ltd shares 23 years ago would currently be worth almost 3.24 crores.

The share price went from 1090.55 on September 1, 2017, where it is currently at for the past five years, which translates to a multibagger yield of 278.24% and an approximate CAGR of 30.49%. The stock has fallen 13.04% over the past year and year-to-date is down 17.34% so far in 2022. On the NSE, the stock has peaked 52 weeks of 5,935.40 on (26 Nov 21) and a 52 week low of 3,361.55 on (26-MAY-22), indicating that at the current market price, the stock is trading 30.50% below the high and 22.70% above the low.

Apollo Hospitals Enterprise Results Q1FY23

For T1FY23, the company reported profit after tax (PAT) or net profit of 317.10 Cr compared to 489.30 Cr in Q1FY22, a year-on-year fall of 35.19%. On a consolidated basis, the company recorded operating revenues of 3,795.60 Cr at T1FY23 compared to 3,760.21 Cr at T1FY22. On a consolidated basis, the company’s total revenue reaches 3,811.66 Cr at T1FY23 which was 3,784.85 at T1FY22. As of Q1FY23, the company reported a total expense of 3,545.36 Cr on a consolidated basis which has been 3,475.58 Cr in the same quarter last year. In Q1FY23, the company’s profit before tax (PBT) reached 254.28 crore, a 57.6% year-on-year decline from 599.23 crore in Q1 FY22.

Should You Buy Apollo Hospitals Enterprise Stock?

Following Apollo Hospitals Enterprise’s performance in the first quarter of FY23, research analysts at brokerage firm Prabhudas Lilladher said, “Apollo Hospitals Enterprises (APHS) consolidated EBITDA down 6% to Rs 4.9 billion, in line with our estimate Adjusted for 24/7 losses, EBITDA increased by 12% YoY Hospital profitability recovered QoQ with growth of EBITDA down 19%, while 24×7 losses remain at high levels Offline Pharmacy (SAP) and AHLL EBITDA down 3% and 39% YoY given the high base Overall occupancy stood at 60% vs. 58% in Q4 ARPOB remains healthy at Rs.51K, up 7% from the quarter thanks to the reduction in ALOS and composition of payers Net debt reduced by 2.1bn QoQ at 9 billion.”

“APHS has pursued aggressive expansion over the past few years, which has created a strong platform for growth. APHS’ digital foray makes it a strong omnichannel game, and given its strong presence in the offline format, the company is a more formidable player than pure online companies. Although the sale of stake in Apollo HealthCo was delayed; scaling up business is one track. We estimate 20% CAGR of EBITDA in FY22-24E. Our FY23E EBITDA is reduced by 5% as we factor in higher losses from 24/7, but our FY24E EBTDA remains unchanged. We rate APHS on a SOTP basis. We attribute an EV/EBITDA multiple of 22x to the hospital segment, 25x EV/EBITDA to offline pharmacy and 20x EV/EBITDA to AHLL. We assign zero value to the 24/7 activity and arrive at a price target of Rs 5,000. Recommend BUY rating,” said research analysts at brokerage firm Prabhudas Lilladher.

Research analysts at brokerage firm Motilal Oswal said: “We are reducing our FY23 EBITDA estimate for APHS by 6%, taking into account: a) higher operating cost for pharmaceuticals as well as for the Apollo Health & Lifestyle (AHLL) segment. We continue to value APHS on an SoTP basis (22x EV/EBITDA for the Hospital segment, 30x EV/EBITDA for the Pharmacy segment and AHLL, and 4x EV/sales for Apollo 24/7) to arrive at our TP of INR 5110. We remain positive on APHS due to: a) robust growth prospects in the hospital segment, b) building a solid foundation for the online pharmacy segment, and c) adding healthcare services through AHLL. We maintain our buy rating.”

Research analysts at brokerage firm ICICI Securities said, “We are keeping buying due to 1) the resumption of elective surgeries and margins at hospitals to improve on the back of better operating leverage and optimizing payer and case mix, 2) imminent unlocking of value through Apollo HealthCo and 3) increasing reach across all verticals with an integrated digital platform to be rewarding over the long term, but with pressure on upstream costs. We appreciate Apollo at 5080 based on SOTP evaluation.”

1. Apollo is undergoing an optical transformation towards creating an omnichannel healthcare platform that could define the platform to tap into new-era investors enabling rapid scaling of the platform. form of digital healthcare, 2. Business standardization in the healthcare industry is expected to continue with renewed momentum due to the lifting of travel restrictions, international patients. Also with a strong pedigree and asset base in healthcare, the company is on track to digitally integrate all entities to leverage its brand and physical presence, 3. New hospitals, companies are becoming profitable through a smart case mix in addition to better occupancy and ramping into new hospitals and AHLL, are the primary triggers for Apollo Hospitals Enterprise’s future price performance, research analysts at the brokerage firm ICICI Securities.

Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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