F&O Buzzer | Bulls continue to fuel the fire for Apollo Hospitals

Apollo Hospitals Enterprise extended its uptrend to the fifth straight session on April 13 as traders continued to add fresh bullish bets in the counter. The surge comes along with a jump in open interest as bulls attempt to take the stock higher.

The stock also surpassed its 200-day exponential moving average at Rs 4,350 and has so far managed to hold up well above that level, a sign that reflects an emerging positive trend. In the past week, the stock notched around 6 percent gains as it broke free of its consolidation seen in the recent months.

It is also important to note that the stock had witnessed short-covering in the past few sessions before traders eventually added long positions.

Rupak De, senior technical and derivative analyst at LKP Securities, anticipates the stock to scale higher towards Rs 4,675 in the near term as the setup remains bullish. Foreseeing more gains in the counter, he suggests investors to buy into the stock at current levels, with a stop loss at Rs 4,350.

At 1.42pm, shares of Apollo Hospitals were trading 3 percent higher at Rs 4,499 on the National Stock Exchange.

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On the fundamental side, expectations of double-digit growth in the company’s pharmacy segment, where it has done significant capital expenditure in the recent quarters, is also driving optimism over the long term growth prospects for Apollo Hospitals.

While the hospital major’s EBIDTA margin has remained under pressure due to its capital expenditure plans which the company believes has now peaked. The company has also guided for a breakeven in its Apollo 24×7 business by the end of FY24.

However, not all sections of the investor community see Apollo Hospitals as an attractive ‘buy’ at the current juncture. A fund manager who did not wish to be named, feels investors should put money into hospital players after they have completed their capital expenditure as that limits the downside potential in the stock.