Shares of Apollo Hospitals Enterprises Ltd gained as much as 3.4 per cent after Citigroup raised its price target for the company to Rs 1,140 from Rs 960, with a 'buy' rating on the stock.
Citi said in a note that aggressive ramp-up has resulted in lower margin for FY14 and that it expects a pick-up in growth from FY15 as a result of the move.
"We believe Apollo looks well set to achieve over 20 per cent topline growth and 80-100bps EBIDTA margin expansion every year over the next few years," it said.
Apollo has funded over 70 per cent of its capex internally over the last three years, up from 21 per cent in FY08. Citi said net debt/equity seems comfortable and that this greater comfort on funding has allowed the company to shift a gear up and step up investment for longer-term growth.
Apollo shares were up 3.1 per cent at Rs 1,020.0 as of 12:46 p.m.
Copyright: Thomson Reuters 2014