Apollo Hospitals Enterprises’ shares saw a rally over the past few sessions after the company announced the formation of a new listed entity through the demerger of its omni-channel pharmacy and digital health businesses.
Apollo shares climbed 4.7% on July 1, reaching a record high of ₹7,584.50. The stock has risen over 6% in the past week.
The ₹7,545 level served as a key resistance, and although the stock briefly crossed it, it pulled back to trade near ₹7,500 by mid-session on July 1.
Apollo Hospitals is set to separate Pharmacy, Digital Health, and Telehealth business, creating a new company, NEWCo. The new company will be formed by combining Apollo HealthCo and Keimed, a wholesale pharmaceutical distributor.
The demerger, expected to be completed within 18 to 21 months, will look to unlock value and streamline operations under Apollo HealthCo.
From a fundamental perspective, SEBI-registered analyst Akhilesh Jat has flagged the stock’s high valuation as a contention point for taking positions, despite the market’s positive reaction to the spin-off.
The valuations appear stretched with the stock currently trading at a PE of 72.02, significantly higher than the sector average of around 38, Jat said. Given this premium pricing, a wait-and-watch approach is recommended before making any fresh entry, he added.
The analyst identified key support levels at ₹6,750 and ₹6,594 and recommended investors to wait for pullbacks towards these levels before taking positions.
At the time of writing, Apollo Hospitals was down 0.75% at ₹7,449, indicating consolidation after a sharp upward move on Tuesday.
Retail sentiment on Stocktwits turned ‘bullish’ from ‘neutral’ a day earlier.
Year-to-date (YTD), the stock has delivered modest returns of around 2%.
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