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India’s Apollo Hospitals stock slides as unit’s valuation underwhelms – ET HealthWorld

London: India’s shares Apollo Hospital After this the business fell by 8.4 percent on Monday hospital The chain sold a stake in its digital unit in a deal that the brokerage said undervalued the subsidiary.

The stock pared some losses and ended down 4.5 percent, its worst day since June 2, 2022. The stock was the second-biggest percentage loser on India’s bluechip Nifty 50 index, which was up 0.65 percent.

Apollo Hospitals, the country’s largest hospital chain by bed capacity, on Friday said Advent International will invest about $297 million in its digital arm Apollo Healthco. Hospital chain will also merge its online pharmacy business With pharmacy distributor Keimed. Advent will hold 12.1 percent stake in the merged entity.

Evaluation From Apollo Healthco Investment It is smaller than expected, said brokerages Nuvama Institutional Equities, Jefferies, CLSA and Prabhudas Lilladher.

“HealthCo’s $1.7 billion valuation came as a negative surprise as $2.7 billion was expected, and management also acknowledged that (Apollo’s pharmacy business) 24/7 was at that valuation,” Nuvema analysts said in a note. Didn’t get what he deserved.”

Apollo Healthco, which includes offline, online pharmacy and a tele-medicine business, has been hurt by its cash-consuming business Apollo 24/7, putting pressure on the hospital operator’s bottom line.

Analysts said the fundraise and the merger with KeyMed are positive, as they will enable Apollo Healthco to expand as an integrated pharmacy player while not having cash flow concerns.

Nuvama, Jefferies and Prabhudas Lilladher maintained their “buy” ratings on Apollo Hospitals stock, while CLSA retained its “outperform” rating.

According to LSEG data, the stock has an average rating of “Buy” with an average price target of Rs 6,953.5, an upside of 14 per cent from its current price of Rs 5,979. (Reporting by Rishika Sadam and Varun Hebbalu; Editing by Mrigank Dhaniwala)

  • Published on April 29, 2024 at 02:13 PM IST

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