Buy Apollo Hospitals; target of Rs 3870: ICICI Direct CICI Direct's research report on Apollo Hospitals Apollo Hospital's Q4FY21 revenues came in at Rs 2868 crore (I-direct estimate: Rs 2857.7 crore). They are not comparable YoY due to restructuring of the retail pharmacy business to pharmacy distribution (post demerger). On the other hand, the hospital segment grew 10.1% YoY to Rs 1443 crore vs. I-direct estimate of Rs 1490 crore. Pharmacy distribution segment revenues came in at Rs 1118.7 crore. EBITDA margins improved 135 bps YoY to 14.4% mainly due to lower staff cost, which likely stems from restructuring of retail pharmacy to pharmacy distribution. Subsequently, EBITDA grew 8.4% YoY to Rs 411.8 crore). Adjusted PAT for the quarter grew 106.3% YoY, 15.3% QoQ to Rs 167.9 crore. Delta vis-à-vis EBITDA was mainly due to lower depreciation, interest cost and higher other income. Outlook We maintain BUY with a revised TP of Rs 3870 (earlier Rs 3170) on SOTP basis by valuing healthcare business (existing hospitals & JV) at 20x FY23E EV/EBITDA, healthcare (new hospitals), pharmacy both at 3x, AHLL at 5x FY23E EV/sales, respectively.