APOLLOHOSP - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.7
| Stock Code | APOLLOHOSP | Market Cap | 1,02,195 Cr. | Current Price | 7,104 ₹ | High / Low | 8,100 ₹ |
| Stock P/E | 72.9 | Book Value | 648 ₹ | Dividend Yield | 0.27 % | ROCE | 16.4 % |
| ROE | 15.1 % | Face Value | 5.00 ₹ | DMA 50 | 7,136 ₹ | DMA 200 | 7,226 ₹ |
| Chg in FII Hold | -0.66 % | Chg in DII Hold | 0.38 % | PAT Qtr | 420 Cr. | PAT Prev Qtr | 307 Cr. |
| RSI | 54.0 | MACD | -48.3 | Volume | 2,21,360 | Avg Vol 1Wk | 3,85,475 |
| Low price | 6,001 ₹ | High price | 8,100 ₹ | PEG Ratio | 3.07 | Debt to equity | 0.34 |
| 52w Index | 52.6 % | Qtr Profit Var | 13.6 % | EPS | 97.5 ₹ | Industry PE | 43.3 |
📊 Analysis: APOLLOHOSP shows moderate-to-strong fundamentals. ROE at 15.1% and ROCE at 16.4% reflect decent capital efficiency, though not exceptional. Debt-to-equity at 0.34 is manageable but higher than ideal. EPS of ₹97.5 supports profitability, and quarterly PAT growth (420 Cr vs 307 Cr) indicates earnings momentum. However, the P/E of 72.9 is significantly higher than the industry average of 43.3, suggesting stretched valuations. The PEG ratio of 3.07 further signals overvaluation relative to growth. Dividend yield of 0.27% is modest, offering limited income support. Technicals show weakness: MACD negative (-48.3), RSI neutral (54.0), and price hovering near DMA 50 and DMA 200, signaling consolidation. Despite strong 52-week index return (52.6%), valuations remain a concern.
💡 Entry Price Zone: Ideal accumulation range is between ₹6,200 – ₹6,500, closer to the 52-week low, offering better valuation comfort.
⏳ Exit / Holding Strategy: Long-term investors (3–5 years) can hold given consistent profitability and sectoral strength. Exit or partial profit booking should be considered near ₹7,900–₹8,100 resistance levels if valuations stretch further without earnings growth acceleration.
Positive ✅
- ROE (15.1%) and ROCE (16.4%) reflect decent efficiency.
- Quarterly PAT growth of 13.6% shows earnings momentum.
- DII holdings increased by 0.38%, reflecting domestic institutional confidence.
- Strong 52-week index return of 52.6% highlights past performance.
Limitation ⚠️
- High P/E (72.9) compared to industry average (43.3).
- PEG ratio of 3.07 signals overvaluation relative to growth.
- Dividend yield of 0.27% is modest.
- Debt-to-equity ratio of 0.34 adds financial risk.
- Weak technicals: MACD negative, price near DMA levels.
- FII holdings decreased (-0.66%), showing reduced foreign investor confidence.
Company Negative News 📉
- High valuation multiples raise concerns about sustainability.
Company Positive News 📈
- Quarterly profit growth highlights operational improvement.
- Strong past performance with 52-week return of 52.6%.
- DII confidence increased with higher holdings.
Industry 🌐
- Industry P/E at 43.3 indicates moderate-to-high valuation levels.
- Healthcare sector benefits from rising demand and long-term structural growth.
Conclusion 📝
APOLLOHOSP is a fundamentally stable company with consistent profitability and sectoral strength, but faces challenges with high valuations and modest ROE/ROCE. Investors should accumulate near ₹6,200–₹6,500 for better risk-reward. Existing holders should maintain a 3–5 year horizon, with partial profit booking near ₹7,900–₹8,100 resistance levels unless earnings growth accelerates significantly.