On Thursday, Apollo Hospitals (NS:APLH) (APHS:IN) stock maintained its Outperform (2) rating with a steady price target of INR 8,400.00, as confirmed by CLSA.
The firm highlighted the company's aggressive expansion strategy, which includes increasing hospital bed capacity by 28% and targeting a 50% growth in Gross Merchandise Value (GMV) for its online pharmacy by the fiscal year 2025.
Additionally, Apollo Hospitals aims for a 19% growth in its offline pharmacy business and expects to surpass the industry growth rate in the diagnostics segment.
The expansion efforts of Apollo Hospitals, India's largest integrated healthcare service provider, are set to capitalize on favorable market conditions. CLSA predicts that these initiatives will likely result in margin and earnings growth for the company between the fiscal years 2025 and 2027.
The firm's analysis suggests that the comprehensive growth strategy being employed by Apollo Hospitals is well-positioned to yield positive financial outcomes in the coming years.
The financial institution's confidence in Apollo Hospitals is reflected in its decision to reiterate the Outperform rating. The valuation is supported by a Discounted Cash Flow (DCF) analysis, which reinforces the INR 8,400.00 price target. This target remains unchanged, indicating the firm's steady faith in the healthcare provider's potential for sustained growth and profitability.
In its commentary, CLSA cited the company's plans to expand its hospital network and enhance its online and offline pharmacy operations. These steps are integral to Apollo Hospitals' broader ambition to not only expand its service offerings but also to deliver superior growth in comparison to the overall industry.
The report from CLSA concludes by reaffirming the Outperform rating and the DCF-based price target of INR 8,400.00 for Apollo Hospitals. This projection underscores the firm's anticipation of the healthcare provider's successful execution of its expansion strategy and the resultant financial benefits over the next few fiscal years.
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