Stocks To Buy: Apollo Hospitals, Dixon, Transport Corp. - Motilal Oswal Bets On These Three Stocks, Know Why

Motilal Oswal Report

Apollo Hospitals - Adding growth levers in hospital/healthco business

Current market price: Rs 6,935 target price: Rs 8,020 (+16%) Buy

Apollo 24/7 has launched insurance products on its online platform. It would be launching concierge service on its online platform as well. This would drive a surge in gross merchandise value as well as expand margins of Apollo Healthco Ltd.

Apollo Hospital Enterprises Ltd. has chalked out plans to add 2,860 beds over the next three years in its current base of 7,942 operating beds. Also, the occupancy remains high at 68- 69%, boosting margins of the hospital business as well.

In the physical format, Apollo Hospital plans to add ~570 Apollo 24/7 stores in H2 FY25. These measures should help Apollo Hospitals provide comprehensive healthcare services to patients.

We value the stock on an SOTP basis (32 times 12 months forward EV/Ebitda for the hospital business, 14 times EV/Ebitda for the retained pharmacy, and 25x EV/Ebitda for Apollo Health and Lifestyle Ltd., 22 times EV/Ebitda for front-end pharmacy and 2x EV/sales for Apollo 24/7) to arrive at our target price of Rs 8,020. Reiterate Buy.

Dixon Technologies - Growth drivers beyond PLI

Current market price: Rs 15,346/ target price: Rs 17,500 (+14%) Buy

We assess Dixon Technologies Ltd.’s growth and margin profile beyond PLI in light of market concerns over its long-term growth and margins. In this note, we try to highlight that-

1. despite PLI ending in FY26, the mobile segment will continue to deliver healthy growth, driven by client additions, improved wallet share, and export opportunities;

2. margins will be supported by company’s initiatives for backward integration in the post-PLI period; and

3. scale-up in other segments will also support growth. We thus expect the company to continue to benefit from the scale-up in existing segments, the addition of new segments, backward integration, and ODM mix improvement.

We maintain our estimates and target price of Rs 17,500. Reiterate Buy.

Transport Corporation of India - On track for sustainable growth

Current market price: Rs 1,061 / target price: Rs 1,290 (+22%) Buy

With a well-diversified logistics portfolio and strong multimodal infrastructure, Transport Corp. is well positioned to capitalize on India's expanding logistics needs. We expect Transport Corp. to achieve a 15% revenue compound annual growth rate over FY24-27, driven by continued growth in the supply chain division, a rising proportion of LTL shipments within the freight division, and a presence across the multi-modal logistics value chain (including a joint venture with Container Corporation for rail transportation).

We reiterate our Buy rating with a target price of Rs 1,290 (based on 18 times Sep-26 earnings per share).

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