Stocks to Watch on Monday – Apollo Hospitals Enterprise Limited stocks ended up by over 7 per cent on Friday from the previous closing price. The stocks were trading at Rs 3431.50 on the NSE at the close gaining by almost Rs 228.

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In the process this stock hit its 52-week high (25 June 2021) at Rs 3465. Meanwhile the 52-week low for Apollo Hospitals is at Rs 1311, this stock hit in July 2020. What triggered this stock price movement? Zee Business’ Devanshi Asher has this detailed report.

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The spike in prices were in the wake of its Q4FY21 results followed by the announcements of restructuring in the company. The share price of Apollo Hospitals took favourable cues from the announcement on the expectations of a value unlocking that would follow from the restructuring exercise, she said.

The company management was also very confident on the prospects during the conference call later in the evening, Asher further said.

As a result of this, many brokerage houses have increased their targets on Apollo Hospitals stocks.

The company is planning to create a separate vertical of its online, offline and pharmacy business, Asher said. This could act as a trigger for the value unlocking and likely benefit the shareholders, she further said.

She also said that the hospital-based pharmacies are likely to remain in its hospital business vertical. Meanwhile remaining pharmacy business along with backend operations are likely to be put in a separate vertical.

This will likely enable formation of a separate strategies for the two verticals, she said.

In its commentary, the company management has said that the overall revenues would go up to Rs 17,000 cr over the next five years.

The revenues from its pharmacy business will alone double by this time from current Rs 5,600 cr to Rs 10,000 cr, she said. The current market share of the company in pharmacy business is around 7 per cent and is expected to go up to 30 per cent, the company has indicated, Asher said.

The company management is also targeting to achieve the breakeven point over the next four years, she further said.

The company is also planning to open additional 5000 stores going forward. The customer base of the company is expected to go up by almost 10 times from current levels, the management has said, Asher pointed out.

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JP Morgan has increased the target price to Rs 4000 from, Rs 3230. Citi has increased the target price to Rs 3750 from Rs 3200 and Credit Suisse puts the target price to Rs 3850 from Rs 3160.