HDFC Securities initiates coverage on these 5 healthcare stocks that can surge up to 20%

May 23, 2024, 10:00:31 AM IST1/6

In Pink Of Health​

​Domestic brokerage firm HDFC Securities has initiated coverage on several healthcare stocks. It sees a strong potential for value unlocking in these companies, which includes Apollo Hospitals Enterprise and Dr Lal Pathlabs. Here is a list of 5 healthcare stocks on which HDFC Securities initiated coverage:

2/6

​Max Healthcare Institute | CMP: Rs 839

HDFC Securities initiated coverage on Max Healthcare Institute with an Add rating. The brokerage firm set a target price of Rs 900 on the stock, which shows an upside potential of 7% from the current market prices.”Its expansion plans for the next five years will drive the next leg of growth; this plan envisages the addition of ~800 beds in FY25 and 1,100 in FY26. Further, the recent acquisitions of operational hospitals, Sahara Hospital in Lucknow (250-bed capacity) and Alexis Hospital in Nagpur (200-bed capacity) are poised to support growth. Additionally, Max Lab, the company’s diagnostics business, is expected to witness robust scaling up in the coming years,” it said.

3/6

Apollo Hospitals Enterprise | CMP: Rs 5,870

HDFC Securities initiated coverage on Apollo Hospitals Enterprise with a Buy rating. The brokerage firm set a target price of Rs 7,030 on the stock, which implies an upside potential of 20% from the current market prices.”We expect APHS to see 17/25% sales/EBITDA CAGRs over FY23-26E and margin improvement to ~14.8% in FY26. We initiate coverage with BUY rating and assign (1) EV/E of 26x to hospital, (2) EV/E of 16x to offline pharmacy, (3) EV/E of 23x to AHLL, and (4) 1x EV/ sales for Apollo 24/7 sales to arrive at SoTP of Rs 7,030 (blended 26x FY25E EV/E),” the brokerage firm said.

4/6

Medplus Health Services | CMP: Rs 695

Domestic brokerage firm HDFC Securities initiated coverage on Medplus Health Services with a Buy rating. The brokerage firm set a target price of Rs 850 on the stock, which indicates an upside potential of 22% from the current market prices.The brokerage expects MEDPLUS’s growth to be driven by: (1) the addition of ~600-700 stores p.a. for deeper penetration in existing clusters to continue expansion in key cities/metros/Tier 1 and expansion in Tier 2 and beyond and the addition of new states; (2) leveraging the omnichannel presence; (3) increasing its private-label share; (4) scaling up its diagnostics business; and (5) the introduction of Medplus brand generics at 50-80% discounts.

5/6

Dr Lal Pathlabs | CMP: Rs 2,586

HDFC Securities initiated coverage on Dr Lal Pathlabs with an Add rating. The brokerage firm set a target price of Rs 2,700 on the stock, which implies an upside potential of 4% from the current market prices.”DLPL’s remarkable trend in the past has slowed down due to increasing competition and price pressure; accordingly, we expect the company to see 11/15/25% sales/EBITDA/PAT CAGRs over FY23-26E. We see a gradual improvement in realization, an increasing share of speciality/Swasthfit, and cost controls to help margin sustain at ~27% in FY25-26,” the brokerage firm said.6/6

​Metropolis Healthcare | CMP: Rs 1,957

HDFC Securities initiated coverage on Metropolis Healthcare with an Add rating. The brokerage firm set a target price of Rs 2,010 on the stock, which shows an upside potential of 3% from the current market prices.”We expect METROHL to see 10/12/16% sales/EBITDA/PAT CAGRs over FY23-26E led by expansion, core business recovery, and price hikes (improvement in realization). Increasing share of specialized tests and wellness, lab infra maturity (current dilution of ~1.2%) and a slowdown in expansion may drive the margin to ~26.3% in FY26,” it said.

Read more on

For more details: Read More