Apollo Hospitals hits 52-week high; stock up 5%

The stock hits 52-week high of Rs 1,324, up 5%, rallied 43%, as compared to 3% rise in the S&P BSE Sensex during past six months.

Shares of healthcare facilities firm, Apollo Hospitals Enterprise, hit their 52-week high of Rs 1,324, up 5% in intra-day trade so far, extending its past two days gain the BSE on Monday.

In November, Apollo Hospitals announced reorganisation of its pharmacy business by segregating the front-end of the business into a separate company and divestment of its 74.5% stake in the front-end business to investors on slump sale basis for Rs 5.3 billion.

In the past six months, the stock has outperformed the market by surging 43%, as compared to 3% rise in the S&P BSE Sensex. Analysts at JP Morgan are positive on the company’s long-term growth opportunity and strong revenue visibility.

“While the stock has underperformed over the past few years due to earnings disappointment, we believe the stabilization in existing hospital margins, ramp-up in new hospitals and lower Apollo Hospitals losses are signs of earnings inflection. The pharmacy business continues to provide margin opportunity, and the potential induction of a partner could be a positive catalyst. We believe the regulatory risk in the sector is priced into the stock at current levels and improving earnings trajectory should drive outperformance over the next year,” the brokerage firm said in report dated on November 15, 2018, with price target price of Rs 1,360 per share.

At 10:45 am; Apollo Hospitals was up 4% at Rs 1,314 on the BSE, as compared to 0.36% rise in the S&P BSE Sensex. A combined 730,633 equity shares changed hands on the counter on the BSE and NSE so far.