Apollo Hospitals & Enterprises (APHS) delivered revenue that matched market expectations for the first quarter of FY27. The company also surpassed earnings expectations, posting a 6% beat in EBITDA and a 5% beat in PAT.
The stronger-than-expected earnings were largely due to improved operating leverage. A robust volume of patients treated, coupled with healthy footfall and higher average realization per patient in the diagnostics segment, pushed revenue up. Additionally, losses from the digital platform were further trimmed, adding to the bottom line.
The hospital arm performed well, registering an 11% growth in acute patient volume. Pricing increased by 4%, and there was a 3% improvement in the case‑mix and payor mix, all of which contributed to the segment’s profitability.
For valuation, the research team applies a “Sum‑of‑The‑Parts” approach. They use a 30x EV/EBITDA multiple for the hospital business, 25x for the offline pharmacy, 24x for the allied health logistics (AHLL) unit, and a 2x EV/sales multiple for the Apollo 24/7 service. This methodology yields a target price of INR 10,160 for the next 12 months.
Based on these findings, the recommendation remains BUY, as the company shows solid growth fundamentals and a favorable valuation outlook.