Apollo Hospitals: Apollo Hospitals Plunges 8% on Disappointing Apollo HealthCo Valuation
The Apollo Hospitals plunged 8% after the part Sale of Apollo 24/7 stake 12.1% to Advent international private equity firm. Brokerage valuation is $2.7 Billion but sale of stake worth is $1.7 billion. So Apollo Hospitals plan of merging entity is lower than estimated analysts view makes Share prices plunged today.
APOLLO HOSPITALS Market Price has broken Ascending channel in downside
Apollo Hospitals Enterprise saw its shares plummet by 8 percent in early trading on April 29, as investors reacted cautiously to the valuations associated with Apollo HealthCo in its recent deal with Advent International.
Apollo HealthCo, responsible for managing the Apollo 24/7 vertical, is set to raise Rs 2,475 crore from global private equity investor Advent International. Additionally, it plans to merge completely with wholesale pharma distributor Keimed Private Ltd over the next 24-30 months.
Advent’s investment in the merged entity will result in a 12.1 percent stake, valuing the combined entity at an enterprise value of Rs 22,481 crore. Of this, Apollo 24/7 is valued at Rs 14,478 crores, while Keimed is valued at Rs 8,003 crore.
Investor concern primarily revolves around the valuation assigned to Apollo 24/7. Nuvama Institutional Equities noted that while the deal was anticipated, the valuation of Apollo HealthCo, or Apollo 24/7, at $1.7 billion falls short of the estimated $2.7 billion, marking a significant disappointment. Doubling Keimed’s valuation within a year also raised eyebrows.
Jefferies shared similar sentiments, expressing dissatisfaction with the valuation assigned to Apollo HealthCo, which fell short of its estimate of Rs 17,000 crore.
Acknowledging investor concerns, Apollo Hospitals management admitted that 24/7 did not receive the expected valuation. Consequently, Nuvama lowered Apollo Hospitals’ price target by around 3 percent to Rs 7,300 while maintaining its “buy” recommendation.
Despite the discounted valuation of Apollo HealthCo, Prabhudas Lilladher views the merger with Keimed positively, seeing it as a move to eliminate any potential leakage. The brokerage finds comfort in the management’s guidance of Rs 1,750-2,000 crore EBITDA for the merged entity by FY27.
Motilal Oswal Financial Services sees the partial stake sale in Apollo HealthCo as a means to inject growth capital. They anticipate a 48 percent earnings CAGR for the merged entity over FY24-26, maintaining a “buy” rating on Apollo Hospitals with a price target of Rs 7,280.
Nuvama also sees potential benefits from the fund-raising, including minimizing 24/7’s cash burn and facilitating future expansion. Leveraging Keimed’s extensive store network could further enhance private label sales and unlock synergies.
The Ircon International JV received the order of Rs.1198 cr from East coast Railway. The company already received the order of Rs 630 from National Highway department in the March month. Now this additional order book for this company and to be executed in 1260 days project.
IRCON INTERNATIONAL Market Price is moving in Ascending trend line and market has rebounded from the higher low area of the pattern
On April 29, during the opening trade, the share price of Ircon International experienced a notable increase of 3.5 percent. This surge followed the announcement that the company’s joint venture (JV) had secured a significant order worth Rs 1,198.09 crore from the East Coast Railway.
The awarded contract pertains to the construction of the Kottavalasa-Koraput Doubling Project, specifically from Shivalingapuram Station to Borraguhalu Station. The project, to be executed in 1,260 days, will be undertaken by Ircon-DRA JV, a collaboration between Ircon International and Dineshchandra R Agrawal Infracon Pvt Ltd (DRA).
Last week, Ircon International faced a VAT demand of Rs 42.87 crore for the RCF Raebareli project for the fiscal year 2014-15. Additionally, in March, the company secured an order from the National Highways & Infrastructure Development Corporation (NHIDCL) for a twin-tube unidirectional Aizawl bypass tunnel and its approaches on the Sairang-Phaiawk section in Mizoram, valued at Rs 630.66 crore.
The Force Motors Q4 Net profit down to 4.3% YoY as Rs.140.3 cr and Revenue increased to 35% as Rs.2011.2 Cr. Operational EBITA margin up to 14% from 8% last quarter, 278.7 cr soared from 120.8 cr in EBITA Operational level.
FORCE MOTORS Market Price is moving in Ascending channel and market has reached higher low area of the channel
On April 29, during morning trading hours, the shares of Force Motors Limited witnessed a significant decline of more than 5 percent. This downturn came on the heels of the company’s announcement of a more than 4 percent drop in net profit for the fourth quarter.
Force Motors, a prominent player in the automobile industry, reported a year-on-year (YoY) decrease of 4.3 percent in net profit, amounting to Rs 140.3 crore. However, the company’s revenue demonstrated an impressive growth of 35 percent, reaching Rs 2,011.2 crore.
During the fourth quarter, Force Motors experienced a substantial increase in operating level EBITDA, soaring to Rs 278.7 crore from Rs 120.8 crore in the corresponding period of the previous fiscal year. Notably, the EBITDA margin expanded to 14 percent, marking a significant improvement of 600 basis points compared to the previous year.
In light of its performance, the board of directors proposed a dividend of Rs 20 per equity share of Rs 10 each for the financial year ended March 31, 2024.
Force Motors is renowned as a fully vertically integrated automobile company, boasting expertise in the design, development, and manufacture of a wide range of automotive components, aggregates, and vehicles. Its product portfolio includes Light Commercial Vehicles (LCV), Multi-Utility Vehicles (MUV), Small Commercial Vehicles (SCV), Sports Utility Vehicles (SUV), and Agricultural Tractors.
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