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Investing.com - Kotak has lowered its price target on Apollo Hospitals (APHS:IN) to INR9,135.00 from INR9,180.00 while maintaining a Buy rating.
The price target reduction follows Apollo Hospitals’ agreement to acquire International Finance Corporation’s approximately 31% stake in Apollo Health & Lifestyle (AHLL) for Rs12.54 billion, Kotak analyst Alankar Garude noted.
The equity valuation of AHLL at Rs41 billion represents approximately a 30% discount to Kotak’s earlier ascribed value for the retail healthcare segment, resulting in a roughly 1% cut in the firm’s sum-of-the-parts valuation.
Apollo Hospitals has also announced plans for a new Proton facility with 100 beds in Gurugram, requiring an investment of Rs5.7 billion.
Kotak maintains that Apollo Hospitals’ bed expansion over FY2025-28E is significantly lower than its peers, which reduces exposure to execution slip-ups, while continued strong free cash flow should address any concerns despite less optimistic projections for the Apollo Healthtech division.
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