Brokerage firm Prabhudas Lilladher has reiterated its 'Buy' rating on Apollo Hospitals Enterprise with a target price of Rs 10,000. The company reported a 23% year-on-year revenue growth in Q2 FY27. Investors are closely watching the upcoming demerger of its digital health and pharmacy business, even as the company adjusts short-term margin guidance due to one-time expenses.
Prabhudas Lilladher has maintained a 'Buy' rating on Apollo Hospitals Enterprise, setting a target price of Rs 10,000. This view comes following the company's second-quarter results for the 2027 fiscal year, where the healthcare major demonstrated robust operational performance. As of early November 2026, the company’s stock has been trading in the range of Rs 8,400 to Rs 8,500.
Financial Performance and Growth
In the second quarter of fiscal year 2027, Apollo Hospitals reported consolidated revenue of Rs 7,615 crore, marking a 23% increase compared to the same period last year. Operating profit, measured as EBITDA, rose by 29% year-on-year to reach Rs 1,191 crore. The brokerage notes that these figures reflect sustained demand for healthcare services across its network.
Value Unlocking via Demerger
A key theme in the brokerage's outlook is the company’s structural realignment. Apollo Hospitals is in the process of demerging its Omnichannel Pharmacy and digital health divisions into a separate listed entity. This move is intended to separate the high-growth digital assets from the established core hospital business, which analysts believe could unlock significant value for shareholders. The scheme is currently in the regulatory pipeline, and investors are tracking the progress of this separation closely.
Margin Outlook and Risks
While the core hospital operations remain strong, the digital and pharmacy platform has adjusted its margin guidance. Apollo HealthCo has revised its Q4 FY27 margin expectations to approximately 6%. This adjustment is largely attributed to one-time organizational expenses and costs related to long-term incentive plans (LTIP).
Investors should be aware of several business risks that could impact future performance. Execution risk remains a monitorable factor, particularly regarding the integration of new hospital bed capacity and the scaling of the digital pharmacy model. Additionally, the broader healthcare sector faces regulatory uncertainty, including the potential expansion of government drug price caps to new segments, which could pressure profit margins. Competitive intensity in both the hospital and digital pharmacy spaces also remains high, requiring the company to maintain service quality while managing costs.
The next major update for shareholders will be the progress of the demerger scheme and management’s ability to improve margins in the digital business toward the mid-to-high single digits. Investors may also track upcoming quarterly updates to gauge whether hospital occupancy levels and pharmacy growth remain consistent with the company's long-term targets.