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Check Before You Invest : Apollo Hospitals Enterprise Ltd

BSE: 508869 NSE: APOLLOHOSP ISIN: INE437A01024
  |   Sector:  Healthcare   |   Industry:  Hospital & Healthcare Services

Snapshot

Q.1 Which industry/sub-sector does Apollo Hospitals Enterprise Ltd belong to?
Apollo Hospitals Enterprise Ltd belongs to the Healthcare sector, operating specifically within the Hospital & Healthcare Services segment.
Q.2 Is Apollo Hospitals Enterprise Ltd a good quality company?
Apollo Hospitals Enterprise Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Apollo Hospitals Enterprise Ltd undervalued or overvalued?
Apollo Hospitals Enterprise Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 79.99 83.39
Price to Book 11.98 11.26
Price to Sales 12.8 11.29
EV to EBITDA 44.77 42.66
Q.4 Is Apollo Hospitals Enterprise Ltd a good buy now?
Apollo Hospitals Enterprise Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Apollo Hospitals Enterprise Ltd?
Apollo Hospitals Enterprise Ltd revenue growth is 12.8% for FY-2025, which is above its 5-year CAGR of -3.49%, indicating faster growth.

Q.2 Gross Profit margin of Apollo Hospitals Enterprise Ltd?
Apollo Hospitals Enterprise Ltd Gross profit margin which is the profit after deduction of direct costs, is 26.1% for FY-2025, which is above its 5-year median of 23.8%, indicating increasing margins.

Q.3 Operating Profit Margin of Apollo Hospitals Enterprise Ltd?
Apollo Hospitals Enterprise Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 24.99% for FY-2025, which is in line with its 5-year median of 24.71% indicating stable margins.

Q.4 Net Profit Margin of Apollo Hospitals Enterprise Ltd?
Apollo Hospitals Enterprise Ltd Net Profit Margin is 15.8% for FY-2025, is above its 5-year median of 13.89%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 26.1 23.8
Operating Profit Margin (%) 24.99 24.71
Net Profit Margin (%) 15.8 13.89

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Apollo Hospitals Enterprise Ltd?
Apollo Hospitals Enterprise Ltd Return on Asset is 10.02%, which is above its 5-year historical median of 8.17%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Apollo Hospitals Enterprise Ltd?
Apollo Hospitals Enterprise Ltd Return on capital employed is 19.25% for FY-2025, which is above its 5-year historical median of 17.2%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.7 Return on Equity (ROE) of Apollo Hospitals Enterprise Ltd?
Apollo Hospitals Enterprise Ltd Return on equity is 15.77% for FY-2025, which is above its 5-year historical median of 13.81%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Apollo Hospitals Enterprise Ltd?
Apollo Hospitals Enterprise Ltd Cash conversion cycle is -9 days, below its 5-year historical median of 1 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.63 0.55
ROE (%) 15.77 13.81
ROCE (%) 19.25 17.2
Cash Conversion Cycle -9 days 1 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Apollo Hospitals Enterprise Ltd?
Apollo Hospitals Enterprise Ltd Debt-to-Equity ratio is 0.20, which is lower the industry average of 0.20, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Apollo Hospitals Enterprise Ltd?
Apollo Hospitals Enterprise Ltd Debt to cash flow from operations is 1.02, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Apollo Hospitals Enterprise Ltd?

Q.1 Promoter shareholding and pledge status of Apollo Hospitals Enterprise Ltd?
Promoters hold 28.02% of the Apollo Hospitals Enterprise Ltd, with 2.49% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Apollo Hospitals Enterprise Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Apollo Hospitals Enterprise Ltd vs industry peers?
Apollo Hospitals Enterprise Ltd revenue CAGR is -3.49%, compared to the industry median CAGR of -3.49%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 12.8 -3.5
Gross Profit Growth (%) 23.7 16.4
Operating Profit Growth (%) 13.7 7.7
Net Profit Growth (%) 28.2 22.5
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.63 0.55
ROE (%) 15.77 13.81
ROCE (%) 19.25 17.2
Cash Conversion Cycle (days) -9.36 1

Valuation & price assessment

Q.1 Stock return of Apollo Hospitals Enterprise Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 20.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
20.1% 20.6% 21.6% 19.2%
Q.2 Valuation ratios of Apollo Hospitals Enterprise Ltd vs historical?
The current P/E ratio of 79.99 is in line with than its historical median of 83.39, indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 79.99 83.39 37.25
Price to Book 11.98 11.26 3.64
Price to Sales 12.8 11.29 4.21
EV to EBITDA 44.77 42.66 17.66

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