Apollo Hospitals' shares hit fresh 52-week high after firm announces stake sell in healthcare platform

Shares of Apollo Hospitals Enterprise Ltd (APLH.NS), a leading hospital chain company in India, touched a new 52-week high of Rs 5008 a share after gaining nearly 1 per cent on the BSE during Monday’s session.

The stock saw buying interest, as it seems that the Street has liked the hospital chain’s decision to sell its stake in the healthcare platform.

According to a Reuters report, Apollo Hospitals plans to raise about $200 million by selling a stake of up to 6 per cent in its online platform, Chief Financial Officer Krishnan Akhileswaran said on Friday.

The company is expecting a valuation of $2.5 billion to $3 billion for its healthcare services platform, Apollo HealthCo Ltd.

Apollo Health Co. has designed an integrated system of genetic, blood/biomarker, and behavioural testing that prepares users for prevention and treatment protocols for ailments like Alzheimer's and diabetes.

Earlier in May 2023, Apollo's fourth-quarter revenue from healthcare services climbed 18.5 per cent and accounted for 51 per cent of its total revenue.

At around 11:30 AM, the stock was quoted at Rs 4,993.05 apiece, up Rs 25.75 or 0.52 per cent on the BSE as compared to the previous day's closing of Rs 4967.30 per share.

Apollo Hospitals Q4 results

Apollo Hospitals Enterprise’s March quarter earnings for the last fiscal year performance were muted due to tepid performance in the hospital segment and losses of online pharmacy.

During the quarter, hospital occupancy fell to 64 per cent sequentially, while the margins too dipped 30 basis points quarter-on-quarter to 24.4 per cent despite lower institutional patient admission.

Brokerages View

Domestic brokerage firm ICICI Securities in its note on Apollo Hospitals said, “Margins are expected to improve in the near term owing to better occupancies, improvement in payer mix and reduction in cash burn in Apollo 24x7.”

The company remains on track to add 2,000 beds by FY27, 500 offline pharmacies, and double the gross merchandise value of online pharmacy in FY24, the brokerage said while maintaining an ‘add rating with a target price of Rs 5000 apiece.

Another brokerage firm Motilal Oswal bullish on Apollo Hospital's growth has maintained a ‘buy’ rating on the stock with a target of Rs 5,450 per share on the stock.

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