Edelweiss Alternative Research has predicted that Apollo Hospitals and Info Edge could be included in the Nifty 50 index in the next rebalancing by the National Stock Exchange. According to the brokerage, the Indian Oil Corporation (IOC) could be dropped from the benchmark index.
Using the Economic Times’ calculations based on the free-float market cap for the last four months and a hypothetical market cap for the next seven weeks, Apollo Hospitals may have a higher chance at the listing than Info Edge. According to Edelweiss, both stocks are 1.5 times larger than IOC’s free-float market cap. The NSE will announce its semi-annual index rejig in the second half of February 2022, and the changes will take effect from April 1, 2022.
Edelweiss said in its report that if IOC’s stock price rises by over 12 percent in the next three weeks, it may be saved from being excluded from the index. In order for a stock to qualify for inclusion in Nifty 50, it should belong to the equity derivatives segment. The average free-float market cap of Avenue Supermarts is significantly higher than the market caps of several other index constituents. In spite of this, the stock is not included in the Nifty 50 index since it is not a part of the F&O segment. According to Edelweiss, Avenue Supermarts could definitely be a member of the Nifty 50 if it remains in the derivatives segment until the announcement date.
At 02:05 pm (IST) on Tuesday, Apollo Hospitals Enterprise Ltd. shares fell 0.12 percent. The stock has touched intraday highs and lows of Rs 5435.25 and Rs 5235.95, respectively. It closed at Rs 5930.7 on Friday last week, and at Rs 5314.65 on Tuesday.
According to the BSE, the total market capitalisation of Apollo Hospitals at the time of writing this report was Rs 76235.34 crores. In terms of consolidated net sales, the company reported Rs 3722.77 crores for the third quarter ended September 30, 2021, down 1.64 percent from Rs 3784.85 crores and up 34.29 percent from Rs 2772.04 crores a year ago.
The company’s net profit for the latest quarter was Rs 247.82 crores, up 311.11 percent from the same period a year ago. It’s shares were held by domestic institutional investors at the end of September, by foreign institutional investors at 51.54 percent, and by promoters at 29.824 percent.
Data from the BSE shows that the stock traded at 73.63 price-to-earnings multiple and 9.07 price-to-book. A high P/E ratio currently indicates that investors are willing to pay a higher price because they expect better growth in the future. Price-to-book value is a measure of the intrinsic value of a company and is the price investors are willing to pay even in the absence of growth.