Stock Pick From Hospital And Medical Service Sector

Apollo Hospital is Asia’s largest and most reliable healthcare group; the company has diversified businesses and its existence includes over 10,000 beds across 64 hospitals, more than 2,000 pharmacies, 100 primary care and diagnostic clinics, and 115 telemedicine units across nine countries. It also offers health insurance services, global projects consultancy, 15 colleges of nursing and hospital management, a research foundation with a focus on global clinical trials, stem cell and genetic research and the first Proton Therapy Centre across Asia, Africa and Australia. The company has reported a robust set of numbers in Q1 FY16 as its income from operations surged higher by 20 per cent to Rs 1,269.6 mn compared to Rs 1,053.72 mn in Q1 FY15. The income from the healthcare services division improved by 12 per cent to Rs 7,450.20 mn for Q1 FY16 as compared to Rs 6,675.90 mn for Q1 FY15. Apollo Pharmacies’ income surged by 35 per cent to Rs 5,200.50 mn for Q1 FY16 from Rs 3,862.20 mn for Q1 FY15. Despite a healthy outperformance in price, this is one of the best stocks available in this space at reasonable valuation.

Road to Prosperity

KNR Construction is a specialised player in road construction, having finished developing 5,888 lane km of road construction over the past decade. KNR has executed projects for a diversified range of clients, namely NHAI, KSHIP, MRPDCL, UPSHA, EIL, Sadbhav Engineering and GMR, amongst others. Over the past 5-6 years, the company has established a track record of timely execution on the back of strong management focus and active involvement of top management in project execution at all stages. The company has a robust order book and recently the company has won another road EPC contract worth Rs 2.56 bn in the state of Madhya Pradesh. Considering the robust order book and healthy debt equity ratio, this will enable the company to grow without substantially sacrificing the margins.