Financial Modelling and Valuation

Abstract

The objective of this study is to build a financial model and a valuation report in order to understand the business of Apollo Hospitals ltd as well as its peers in the industry. It helped in performing analytical interpretation to dive deep into strategic planning of Apollo Hospitals ltd. It is used to test various scenarios, calculate cost of operations, budgets for new hospitals or increase in the number of beds to allocate corporate resources efficiently. In order to conduct a thorough research before making the assumptions for forecasting, annual reports and investor presentations were thoroughly analyzed. I projected their revenues, assets, equity and liabilities for proceeding years by understanding their growth trends of previous years as well as impact of external factors like Covid-19. The capital expenditure and debt schedules are also prepared for the same. Every assumption is backed with proper reasoning to increase the credibility of the model. To the guidance I received and hard work, I was able to project a fairly well balanced model with an expected increase in share price. The Consolidated Revenue growth was about 17% from FY2018 to FY2019. EPS doubled in FY2019 making the company attractive for investors. Steady impprovement in Return on Capital Employed through efficient use of capital. ROCE, including investment for new hospitals, stood at 12% for FY2019. The Solvency Ratios are well above the danger limit, indicating strong financial position of the company. Overall, a positive outlook for the company was observed. Considering future opportunities and its edge over its competitors, Apollo hospitals ltd is expected to have a strong hold in the healthcare sector and a robust all round performance will be seen in coming years.