Shares of Apollo Hospitals gain; Citi raises price target

Reuters Market Eye - Shares of Apollo Hospitals Enterprises Ltd gain as much as 3.4 percent after Citigroup raises its price target for the company to 1,140 rupees from 960 rupees, with a 'buy' rating on the stock.

Citi said in a note that aggressive ramp-up has resulted in lower margin for FY14 and that it expects a pick-up in growth from FY15 as a result of the move.

"We believe Apollo looks well set to achieve over 20 percent topline growth and 80-100bps EBIDTA margin expansion every year over the next few years," it said.

Apollo has funded over 70 percent of its capex internally over the last three years, up from 21 percent in FY08. Citi said net debt/equity seems comfortable and that this greater comfort on funding has allowed the company to shift a gear up and step up investment for longer-term growth.

Apollo shares up 3.1 percent at 1,020.0 rupees at 12:46 p.m.

(Reporting by Indulal PM)