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RESULT UPDATE

APOLLO HOSPITALS ENTERPRISE


Challenging quarter
India Equity Research| Healthcare
COMPANYNAME
Apollo Hospitals (APHS) Q1FY18 consolidated revenue grew 14%, but
EDELWEISS 4D RATINGS
EBITDA fell 8% YoY due to: (a) Price control on stents
Absolute Rating BUY
INR250mn/quarter impact; (b) Loss of INR150mn in recently
Rating Relative to Sector Outperform
commissioned Navi Mumbai hospital; and (c) Settlement of staff salary
Risk Rating Relative to Sector Low
(once in 3 years). Kolkata hospital, a 50:50 joint venture (JV), was recently Sector Relative to Market Equalweight
embroiled in controversies, which led to 25% dip in occupancy.
Management reiterated that capex cycle peaked in FY17 and will fall by
50% from FY18. We believe regulatory challenges and slow ramp up in MARKET DATA (R: APLH.BO, B: APHS IN)
AHLL could slacken pace of margin improvement, despite end of capex CMP : INR 1,159
cycle. We are building in 450bps expansion in margin by FY21, primarily Target Price : INR 1,540
spearheaded by turnaround in AHLL and Navi Mumbai hospital (refer our 52-week range (INR) : 1,437 / 1,111
Share in issue (mn) : 139.1
note) by FY19. Maintain BUY with TP of INR1,540.
M cap (INR bn/USD mn) : 161 / 2,514
Avg. Daily Vol.BSE/NSE(000) : 338.1
Existing hospitals post subdued performance
Escalation of cost at existing hospitals along with losses at Navi Mumbai impacted SHARE HOLDING PATTERN (%)
hospitals business EBITDA fell 8% despite 14% revenue growth. EBITDA margin
Current Q4FY17 Q3FY17
plunged 207bps to 8.7%. Overall RoCE slipped to 7.7% following commissioning of the Promoters * 34.4 34.4 34.4
Navi Mumbai hospital. APHS reported loss of INR150mn with 70% utilisation in initial
MF's, FI's & BKs 7.8 4.6 2.7
commissioned capacity of 150 beds of total 500 beds. While pharmacy revenue grew
FII's 48.2 46.9 43.2
21%, margin at 4.2% was up 70bps YoY. Pharmacy RoCE improved to 14.8% from 9.9%
Others 9.7 14.2 19.8
YoY. While AHLLs revenue grew 18% YoY, EBITDA loss remained flat at INR283mn. * Promoters pledged shares : NIL
(% of share in issue)

RoCE to improve over medium to long term


PRICE PERFORMANCE (%)
New hospitals, with ~INR12bn capital employed, are running at ~40% occupancy and
EW Pharma
are yet to contribute to RoCE. Similarly, AHLL has INR5.5bn capital employed, but is Stock Nifty
Index
running at mere ~30% utilisation. We believe upfront investmentsNavi Mumbai
1 month (7.5) 0.1 (10.1)
hospital (480 beds, INR6bn capex) and AHLLwill squeeze near-term margins.
3 months (11.5) 4.8 (12.2)
However, APHS will only employ ~INR7.5bn fresh capital for new hospitals and over
12 months (17.9) 14.1 (17.2)
medium to long term would look at optimising asset utilisation and improve case mix,
which is bound to drive margins and RoCE.

Outlook and valuations: Metamorphosing; maintain BUY


We estimate 22% EBITDA CAGR and RoCE to jump 390bps to ~11% over FY17-19. At
CMP, the stock trades at 18x FY19E EV/EBITDA. We maintain BUY/SO with target
price of INR1,540, based on 20x FY19E EV/EBITDA.
Financials (Consolidated) (INR mn)
Year to March Q1FY18 Q1FY17 % chg Q4FY17 % chg FY17 FY18E FY19E
Deepak Malik
Net revenue 19,031 16,664 14.2 18,331 3.8 72,549 83,013 95,727 +91 22 6620 3147
EBITDA 1,649 1,789 (7.8) 1,510 9.2 7,286 8,429 10,778 deepak.malik@edelweissfin.com

EBITDA margin (%) 8.7 10.7 8.2 10.0 10.2 11.3 Archana Menon
Adj. Profit 9 488 (98.2) 555 (98.4) 2,210 2,873 5,041 +91 22 6620 3020
P/E (x) 73.0 56.1 32.0 archana.menon@edelweissfin.com

EV/EBITDA (x) 26.2 22.7 17.7


ROACE (%) 6.7 7.6 10.7 August 16, 2017
Edelweiss Research is also available on www.edelresearch.com,
Bloomberg EDEL <GO>, Thomson First Call, Reuters and Factset. Edelweiss Securities Limited
Healthcare

Conference call: Key highlights


Key Highlights
Factors that impacted EBITDA
Price control on stents impact of INR250mn/quarter- recovered 50%. Plans afoot to
recover balance over next 2-3 quarters (impact was lower in Q4FY17)
Navi Mumbai-INR150mn/quarter loss. Good traction in demand. Breakeven in March
2018. Positive EBITDA in FY19
Guaranteed money payout to doctors not yet recovered from patients - INR80-100mn

Lower EBITDA at existing hospitals (20% margin versus usual 23%)


Stent price control (150bps impact)
Recruiting new doctors who need guaranteed fees, which is not yet completely
recovered from patients
Increase in staff cost due to settlement, which happens once in 3 years

Factors that impacted consolidated performance


Kolkata hospital intervention by government and negative media publicity. 20-25%
dip in occupancy. EBITDA INR200mn lower (INR100mn loss this year). Will take 2-3
quarters to revert to normal
AHLL PAT loss of INR260mn. Will recover by Q3FY18
Change in accounting in Munich. Intend to be PAT positive in Q4FY18 and for full year

Chennai cluster
Chennai main hospital: 6% growth. Have been renegotiating with some corporates (15-
20% of revenue), impact will be visible in next 12 months
Vanagram Lower volumes due to 2 star doctors being on vacation
OMR Women and Child Lower volume due to exit of one gynaecologist
3% price increase taken in July 2017
Should be able to retain 20-25% market share in the region
14% growth in international patients
No major doctor attrition

Hyderabad cluster
No price hike taken, growth driven by volume increase

New hospitals
Navi Mumbai, Vizag, Guwahati showing strong pickup
Navi Mumbai 90-100 occupied beds currently. Q2FY18 performance to be better
Occupancy of new beds at 55%

Existing centers: Expects to see 5-10% growth in existing centers for full year. Most hospitals
have ~60% occupancy. Expects 22-23% margin in FY19

2 Edelweiss Securities Limited


Apollo Hospitals Enterprise

International patients - 12% of revenue. 25% more profitable than domestic patients

Focus therapies: Oncology, Orthopaedics, Neurosciences, Transplants, Paediatrics, general


medicine

Expansion
Oncology - Navi Mumbai (FY18 end), Bhubaneswar (after Navi Mumbai), Vizag (FY19
end)
Capex - On Bhubaneswar and Vizag Onco centers not significant
Onco center in Chennai - By FY18 end to start of FY19
Byculla (lease model) - to be commissioned after 3 years

Price control: The company believes price control on consumables will not impact it in long
term. Impact of price control on orthopaedics will not impact as much as stents.

AHLL: Next 2 quarters to start seeing improvement in profitability. Should be growing at 20-
21%. Expects to breakeven by FY19 end

Standalone Pharmacies
Expects to add 250 stores each year
GST will be beneficial

Others
Cost of debt - 5.6%
Added 2,400 beds over past 3 years
Witnessed 20% drop in individual cash holding post demonetisation
Plans to release pledged shares in FY19

3 Edelweiss Securities Limited


Healthcare
Table 1: Segment-wise break-up of revenue and EBITDA
Q2FY15 Q3FY15 Q4FY15 Q1FY16 Q2FY16 Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY19
Standalone hospitals (existing)
Revenue 6,738 6,660 6,711 7,042 7,374 7,102 7,266 7,050 7,816 7,414 7,529 7,478
EBITDA 1,607 1,556 1,654 1,641 1,783 1,590 1,634 1,642 1,740 1,575 1,593 1,507
EBITDA margin(%) 23.8 23.4 24.6 23.3 24.2 22.4 22.5 23.3 22.3 21.2 21.2 20.2
Standalone hospitals (new)
Revenue 418 454 546 823 902 1,034 1,120 1,279 1,426 1,504 1,654 1,724
EBITDA (24) (25) (10) (38) (1) 45 (16) 18 132 4 (197) (91)
EBITDA margin(%) NA NA NA NA NA 4.4 NA 1.4 9.3 0.3 (11.9) (5.3)
Standalone pharmacies
Revenue 4,372 4,712 4,780 5,192 5,822 6,115 6,092 6,325 7,099 7,888 7,433 7,642
EBITDA 143 151 166 174 203 223 203 219 348 362 304 320
EBITDA margin(%) 3.3 3.2 3.5 3.4 3.5 3.6 3.3 3.5 4.9 4.6 4.1 4.2
AHLL
Revenue 243 232 422 411 459 595 429 572 626 816 427 677
EBITDA (52) (24) (165) (212) (266) (268) (416) (279) (239) (259) (292) (283)
Total consolidated revenue
Revenue 13,150 13,424 13,186 14,400 15,803 15,981 15,963 16,642 18,462 19,114 18,331 19,031
EBITDA 1,925 1,912 1,779 1,751 1,911 1,688 1,528 1,789 2,200 1,877 1,420 1,649
EBITDA margin(%) 14.6 14.2 13.5 12.2 12.1 10.6 9.6 10.7 11.9 9.8 7.7 8.7
Source: Company, Edelweiss research

Table 2: Revenue mix by segment (standalone)


Chennai Q1FY18 Q1FY17 % chg Q4FY17 % chg
Revenue 3,618 3,498 3.4 3,586 0.9
Inpatient revenue (%) 72 74 (2.2) 74 (1.9)
Outpatient revenue (%) 28 26 6.3 26 5.5
Operational beds 1,518 1,529 (0.7) 1,532 (0.9)
Occupancy (%) 54 59 (7.9) 57 (3.9)
ARPOB 48,058 42,664 12.6 45,347 6.0
ALOS 3.4 3.8 (9.3) 3.6 (5.5)
Hyderabad
Revenue 1,768 1,507 17.3 1,793 (1.4)
Inpatient revenue (%) 84 82 1.7 83 0.8
Outpatient revenue (%) 16.3 18 (7.7) 17 (3.9)
Operational beds 839 839 - 839 -
Occupancy (%) 63 61 3.0 64 (1.7)
ARPOB 36,744 32,564 12.8 36,636 0.3
ALOS 3.7 3.7 0.3 3.9 (5.1)
Others
Revenue 2,677 2,144 24.9 2,598 3.0
Inpatient revenue (%) 85 86 (0.6) 86 (0.8)
Outpatient revenue (%) 15 14 3.4 14 5.1
Operational beds 2,228 2,040 9.2 2,179 2.2
Occupancy (%) 61 57 6.4 59 2.0
ARPOB 21,705 20,230 7.3 21,968 (1.2)
ALOS 4.1 4.2 (1.2) 4.2 (1.4)
Source: Company, Edelweiss research

4 Edelweiss Securities Limited


Apollo Hospitals Enterprise

Financial snapshot (INR mn)


Year to March Q1FY18 Q1FY17 % change Q4FY17 % change FY17 FY18E FY19E
Net revenues 16,845 14,654 14.9 16,616 1.4 72,549 83,013 95,727
Cost of revenue 8,850 7,589 16.6 8,664 2.1 35,954 41,507 47,864
Gross profit 7,995 7,066 13.2 7,953 0.5 36,595 41,507 47,864
EBITDA 1,736 1,880 (7.6) 1,701 2.1 7,286 8,429 10,778
EBITDA margin 10.3 12.8 10.2 10.0 10.2 11.3
Depreciation 646 557 16.0 628 2.9 3,140 3,193 3,182
EBIT 1,090 1,322 (17.6) 1,073 1.6 4,146 5,235 7,597
Other income (38) 42 NA 91 NA 225 84 88
Interest 555 444 25.0 578 (4.0) 2,574 2,061 1,941
Add: Exceptional items
Profit before tax 498 921 (45.9) 586 (15.1) 1,797 3,259 5,744
Provision for taxes 146 199 (26.8) 104 39.6 910 652 1,149
Minority interest (899) (52) (73)
Associate profit share - - - 424 214 373
Reported net profit 352 722 (51.2) 482 (26.9) 2,210 2,873 5,041
Adjusted Profit 352 722 (51.2) 482 (26.9) 2,210 2,873 5,041
Diluted shares (mn) 139 139 139 139 139 139
Adjusted Diluted EPS 2.5 5.2 (51.2) 3.5 (26.9) 15.9 20.7 36.2
Diluted P/E (x) - - - 73.0 56.1 32.0
EV/EBITDA (x) - - - 26.2 22.7 17.7
ROAE (%) - - - 3.5 7.1 11.9

As % of net revenues
Cost of revenue 52.5 51.8 52.1 49.6 50.0 50.0
Gross profit 47.5 48.2 47.9 50.4 50.0 50.0
Total expenses 109.2 103.3 107.2 90.0 89.8 88.7
Operating profit 6.5 9.0 6.5 5.7 6.3 7.9
Reported net profit 2.1 4.9 2.9 3.0 3.5 5.3
Tax rate 29.3 21.6 17.8 50.6 20.0 20.0

5 Edelweiss Securities Limited


Healthcare

Company Description
Apollo is widely recognised as the pioneer of private healthcare in India, and was the
countrys first corporate hospital. The Apollo Hospitals Group, which started as a 150-bed
hospital in Chennai in 1983 and today, operates 6,800 beds across 61 hospitals. The Group
has emerged as the foremost integrated healthcare provider in Asia, with mature group
companies that specialize in insurance, pharmacy, consultancy, clinics and many such key
touch points of the ecosystem.

The group includes Hospitals, pharmacies, primary care and diagnostic clinics, telemedicine
centres and Apollo Munich Insurance branches panning the length and breadth of India. As
an integrated healthcare service provider with health insurance services, global projects
consultancy capability, medical education centres and a research foundation with a focus on
global clinical trials, epidemiological studies, stem cell & genetic research, Apollo has been
at the forefront of new medical breakthroughs with the most recent investment being that
of commissioning the first Proton Therapy Center across Asia, Africa and Australia in
Chennai, India.

Investment Theme
Apollo Hospitals Enterprise (Apollo), Indias largest hospital chain, is equipping itself to
successfully battle the anticipated disruption in the healthcare sector. Going forward, it is
targeting select tertiary care focused greenfield investments and focus on improving
operating metrics for the capacity it has rapidly created over the past 5 years. Under Apollo
Health and Lifestyle (AHLL), it is adding a number of new healthcare delivery formats
focused on primary and secondary care that are bound to bolster its patient engagement
early in the lifecycle. We estimate 22% EBITDA CAGR and RoCE to jump 390bps to ~11%
over FY17-19, that implies valuation of 18x FY19E EV/ EBITDA. We maintain BUY/SO with
TP of INR1,540.

Key Risks
Success of business depends on expansion of network

Subsidiaries may be unable to sustain profitability in the future


Specialist physicians could dis-associate
Rising infrastructure costs could restrict investment

6 Edelweiss Securities Limited


Apollo Hospitals Enterprise

Financial Statements
Key Assumptions Income statement (INR mn)
Year to March FY16 FY17 FY18E FY19E Year to March FY16 FY17 FY18E FY19E
Macro Income from operations 62,147 72,549 83,013 95,727
GDP(Y-o-Y %) 7.2 6.5 7.1 7.7 Materials costs 30,547 35,954 41,507 47,864
Inflation (Avg) 4.9 4.5 4.0 4.5 Employee costs 10,236 11,965 13,999 16,099
Repo rate (exit rate) 6.8 6.3 5.8 5.8 EBITDA 6,878 7,286 8,429 10,778
USD/INR (Avg) 65.0 67.5 66.0 66.0 Operating profit 6,878 7,286 8,429 10,778
Company EBIT 4,239 4,146 5,235 7,597
Bed capacity 6,454 6,730 6,991 7,091 Add: Other income 450.3 224.9 84.14 88.26
Pharmacy additions (YoY) 2,326.0 2,556.0 2,806.0 3,056.0 Less: Interest Expense 1,800 2,574 2,061 1,941
Tax rate (%) 31.8 50.6 20.0 20.0 Add: Exceptional items 159 - - -
Profit Before Tax 3,049 1,797 3,259 5,744
Less: Provision for Tax 969 910 652 1,149
Less: Minority Interest (12) (899) (52) (73)
Associate profit share 272 424 214 373
Reported Profit 2,364 2,210 2,873 5,041
Exceptional Items 109 - - -
Adjusted Profit 2,255 2,210 2,873 5,041
Shares o /s (mn) 139 139 139 139
Adjusted Basic EPS 16.2 15.9 20.7 36.2
Diluted shares o/s (mn) 139 139 139 139
Adjusted Diluted EPS 16.2 15.9 20.7 36.2
Adjusted Cash EPS 35.2 38.5 43.6 59.1
Dividend per share (DPS) 6.0 5.6 7.3 12.8
Dividend Payout Ratio(%) 35.3 35.3 35.3 35.3

Common size metrics


Year to March FY16 FY17 FY18E FY19E
Operating expenses 88.9 90.0 89.8 88.7
Materials costs 49.2 49.6 50.0 50.0
Staff costs 16.5 16.5 16.9 16.8
Depreciation 4.2 4.3 3.8 3.3
Interest Expense 2.9 3.5 2.5 2.0
EBITDA margins 11.1 10.0 10.2 11.3
Net Profit margins 3.6 1.8 3.4 5.2

Growth ratios (%)


Year to March FY16 FY17 FY18E FY19E
Revenues 17.7 16.7 14.4 15.3
EBITDA (6.4) 5.9 15.7 27.9
PBT (33.1) (41.1) 81.3 76.3
Adjusted Profit (31.7) (2.0) 30.0 75.4
EPS (31.7) (2.0) 30.0 75.4

7 Edelweiss Securities Limited


Healthcare

Balance sheet (INR mn) Cash flow metrics


As on 31st March FY16 FY17 FY18E FY19E Year to March FY16 FY17 FY18E FY19E
Share capital 696 696 696 696 Operating cash flow 4,232 4,022 5,929 8,906
Reserves & Surplus 33,841 36,018 37,639 40,544 Investing cash flow (6,840) (8,142) (4,000) (3,000)
Shareholders' funds 34,537 36,714 38,335 41,239 Financing cash flow 2,725 2,346 (3,279) (6,077)
Minority Interest 1,303 2,164 2,112 2,040 Net cash Flow 116 (1,774) (1,349) (171)
Short term borrowings 1,820 532 532 532 Capex (8,306) (8,759) (4,000) (3,000)
Long term borrowings 22,956 30,065 30,065 28,065
Total Borrowings 24,776 30,598 30,598 28,598 Profitability and efficiency ratios
Long Term Liabilities 45 366 366 366 Year to March FY16 FY17 FY18E FY19E
Def. Tax Liability (net) 4,843 929 929 929 ROAE (%) 6.6 3.5 7.1 11.9
Sources of funds 65,504 70,770 72,339 73,171 ROACE (%) 8.4 6.7 7.6 10.7
Depreciation 2,638 3,140 3,193 3,182 Inventory Days 47 46 46 46
Net Block 34,443 42,758 43,565 43,383 Debtors Days 42 40 40 40
Capital work in progress 5,956 3,467 3,467 3,467 Payable Days 55 51 49 46
Intangible Assets 3,803 3,742 3,742 3,742 Cash Conversion Cycle 34 35 37 40
Total Fixed Assets 44,203 49,968 50,774 50,593 Current Ratio 2.7 3.2 2.6 2.5
Non current investments 1,980 121 121 121 Gross Debt/EBITDA 3.6 4.2 3.6 2.7
Cash and Equivalents 4,693 2,919 1,535 1,364 Gross Debt/Equity 0.7 0.8 0.8 0.7
Inventories 4,433 4,669 5,838 6,278 Adjusted Debt/Equity 0.7 0.8 0.8 0.7
Sundry Debtors 7,020 7,482 9,112 10,024 Net Debt/Equity 0.6 0.7 0.7 0.6
Loans & Advances 13,923 13,986 17,948 18,877 Interest Coverage Ratio 2.4 1.6 2.5 3.9
Other Current Assets 487 891 685 1,132
Current Assets (ex cash) 25,862 27,028 33,583 36,311 Operating ratios
Trade payable 5,037 5,005 6,031 6,048 Year to March FY16 FY17 FY18E FY19E
Other Current Liab 6,196 4,262 7,644 9,170 Total Asset Turnover 1.0 1.0 1.1 1.2
Total Current Liab 11,234 9,266 13,675 15,218 Fixed Asset Turnover 1.6 1.6 1.6 1.9
Net Curr Assets-ex cash 14,628 17,762 19,908 21,093 Equity Turnover 1.7 1.8 1.9 2.1
Uses of funds 65,504 70,770 72,339 73,171
BVPS (INR) 248.2 263.9 275.5 296.4 Valuation parameters
Year to March FY16 FY17 FY18E FY19E
Free cash flow (INR mn) Adj. Diluted EPS (INR) 16.2 15.9 20.7 36.2
Year to March FY16 FY17 FY18E FY19E Y-o-Y growth (%) (31.7) (2.0) 30.0 75.4
Reported Profit 2,364 2,210 2,873 5,041 Adjusted Cash EPS (INR) 35.2 38.5 43.6 59.1
Add: Depreciation 2,638 3,140 3,193 3,182 Diluted P/E (x) 71.5 73.0 56.1 32.0
Interest (Net of Tax) 1,228 1,271 1,649 1,553 P/B (x) 4.7 4.4 4.2 3.9
Others (4,316) (5,601) (1,750) (1,426) EV / Sales (x) 3.2 2.9 2.5 2.2
Less: Changes in WC (2,317) (3,003) 36 (557) EV / EBITDA (x) 26.6 26.2 22.7 17.7
Operating cash flow 4,232 4,022 5,929 8,906 Dividend Yield (%) 0.5 0.5 0.6 1.1
Less: Capex 8,306 8,759 4,000 3,000
Free Cash Flow (5,875) (7,310) (132) 3,965

Peer comparison valuation


Market cap Diluted P/E (X) EV / EBITDA (X) ROAE (%)
Name (USD mn) FY18E FY19E FY18E FY19E FY18E FY19E
Apollo Hospitals Enterprise 2,514 56.1 32.0 22.7 17.7 7.1 11.9
Dr. Lal Pathlabs Ltd 1,048 40.4 32.3 24.3 19.3 22.7 23.6
FORTIS HEALTHCARE LTD 1,221 (311.3) 160.3 16.0 13.9 0.2 1.6
HealthCare Global Enterprises Limited 365 96.7 67.1 21.1 16.5 5.1 8.3
Max India Limited 596 318.8 185.0 15.9 12.5 2.1 3.6
Thyrocare Technologies Ltd 594 41.7 32.7 24.5 19.0 23.0 25.7
Source: Edelweiss research

8 Edelweiss Securities Limited


Apollo Hospitals Enterprise

Additional Data
Directors Data
Prathap C Reddy Founder, Chairman Preetha Reddy Executive Vice Chairperson
Suneeta Reddy Director Sangita Reddy Director
Rajkumar Menon Director Rafeeque Ahamed Director
N Vaghul Director G Venkatraman Director
Shobana Kamineni Executive Vice Chairperson Deepak Vaidya Director

Auditors - S Viswanathan
*as per last annual report

Holding Top10
Perc. Holding Perc. Holding
Pcr investments ltd 19.57 Massachusetts mutual 8.67
Schroders plc 5.3 Integrated healthcar 4.78
Reddy prathap c 3.91 Reddy suneeta 2.43
Vanguard group 2.35 Alliance bernstein 2.12
Blackrock 1.9 Reddy sangita 1.75
*in last one year

Bulk Deals
Data Acquired / Seller B/S Qty Traded Price

No Data Available
*in last one year

Insider Trades
Reporting Data Acquired / Seller B/S Qty Traded

No Data Available
*in last one year

9 Edelweiss Securities Limited


RATING & INTERPRETATION

Company Absolute Relative Relative Company Absolute Relative Relative


reco reco risk reco reco Risk
Apollo Hospitals Enterprise BUY SO L Dr. Lal Pathlabs Ltd BUY SP L
FORTIS HEALTHCARE LTD BUY SO L HealthCare Global Enterprises BUY SP M
Limited
Max India Limited BUY SO L Thyrocare Technologies Ltd BUY SP M

ABSOLUTE RATING
Ratings Expected absolute returns over 12 months

Buy More than 15%

Hold Between 15% and - 5%

Reduce Less than -5%

RELATIVE RETURNS RATING


Ratings Criteria
Sector Outperformer (SO) Stock return > 1.25 x Sector return

Sector Performer (SP) Stock return > 0.75 x Sector return

Stock return < 1.25 x Sector return

Sector Underperformer (SU) Stock return < 0.75 x Sector return

Sector return is market cap weighted average return for the coverage universe
within the sector

RELATIVE RISK RATING


Ratings Criteria

Low (L) Bottom 1/3rd percentile in the sector

Medium (M) Middle 1/3rd percentile in the sector

High (H) Top 1/3rd percentile in the sector

Risk ratings are based on Edelweiss risk model

SECTOR RATING
Ratings Criteria
Overweight (OW) Sector return > 1.25 x Nifty return

Equalweight (EW) Sector return > 0.75 x Nifty return

Sector return < 1.25 x Nifty return

Underweight (UW) Sector return < 0.75 x Nifty return

10 Edelweiss Securities Limited


Apollo Hospitals Enterprise

Edelweiss Securities Limited, Edelweiss House, off C.S.T. Road, Kalina, Mumbai 400 098.
Board: (91-22) 4009 4400, Email: research@edelweissfin.com

ADITYA
Digitally signed by ADITYA NARAIN
DN: c=IN, o=EDELWEISS SECURITIES LIMITED,
Aditya Narain ou=HEAD RESEARCH, cn=ADITYA NARAIN,
serialNumber=e0576796072ad1a3266c27990f
20bf0213f69235fc3f1bcd0fa1c30092792c20,
Head of Research

NARAIN
postalCode=400005,
2.5.4.20=3dc92af943d52d778c99d69c48a8e0c
89e548e5001b4f8141cf423fd58c07b02,
aditya.narain@edelweissfin.com st=Maharashtra
Date: 2017.08.16 21:53:28 +05'30'

Coverage group(s) of stocks by primary analyst(s): Healthcare


Apollo Hospitals Enterprise, Dr. Lal Pathlabs Ltd, FORTIS HEALTHCARE LTD, HealthCare Global Enterprises Limited, Max India Limited, Thyrocare
Technologies Ltd

Recent Research

Date Company Title Price (INR) Recos

04-Aug-17 Fortis Steady Quarter; 166 Buy


Healthcare Result Update
01-Jun-17 Max Steady quarter; capex plan 149 Buy
India advanced;
Result Update
31-May-17 Apollo At inflection point; 1,211 Buy
Hospitals Result Update

Distribution of Ratings / Market Cap


Edelweiss Research Coverage Universe Rating Interpretation

Buy Hold Reduce Total Rating Expected to

Rating Distribution* 161 67 11 240 Buy appreciate more than 15% over a 12-month period
* 1stocks under review
Hold appreciate up to 15% over a 12-month period
> 50bn Between 10bn and 50 bn < 10bn
743
Reduce depreciate more than 5% over a 12-month period
Market Cap (INR) 156 62 11
594

One year price chart


446
1,600
(INR)

297 1,500

149 1,400
(INR)

1,300
-
Apr-14

Sep-14
Feb-14

Mar-14

Jun-14

Dec-14
Jul-14

Aug-14

Oct-14

Nov-14
May-14
Jan-14

1,200

1,100
Apr-17
Sep-16

Feb-17

Mar-17

Jun-17
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Jul-17
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Apollo Hospitals Enterprise

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Healthcare

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Apollo Hospitals Enterprise
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Healthcare

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