Apollo Hospitals Enterprises could not keep up to its gains today on the BSE after rallying 12 per cent on Union Budget day, vindicated by budgetary sops to the healthcare segment. The scrip closed today at Rs 109.50. In the morning trades, however, the scrip of the healthcare group edged up 1 per cent to Rs 113.70 on BSE. It touched a high of Rs 116.55. A total of 2.73 lakh AHEL shares were traded on the BSE today.
The scrip soared 12.6 per cent on Friday after the budget offered some significant incentives to corporate hospitals. The rally on the counter came on high volumes of 8.4 lakh shares. Market sources say that the stock is supposedly a favourite with local brokerage Motilal Oswal Securities.
In the last few trading sessions, the stock witnessed weakness, falling to the Rs 97.95 level on February 14 from Rs 113.95 on January 8.
The Union Budget 2003-2004 has increased the rate of depreciation on life-saving medical equipment from 25 per cent to 40 per cent. While this is intended to accelerate the R&D in medical equipment, it will also benefit large corporate hospitals like Apollo Hospital. Further, the Union Budget has also proposed the extension of benefit U/s 10 (23 G) of the Income Tax Act to financial institutions providing long-term capital to private hospitals with 100 beds or more.
The above provision will enable greater flow of low-cost funds to the private sector hospital industry. With the need for healthcare growing at a fast pace, profitability of private sector hospitals is set to improve. However, this will happen only if the interest charged to hospitals is lowered. The budget proposals enable a reduction in interest cost of hospitals by providing exemption to the funding institutions.
Duty incentive heats up Blue Star
Blue Star advanced today with a cut in excise duty raising hopes of a surge in demand for its products. The scrip of the air-conditioning major closed higher by 3.74 per cent at Rs 80.40. In the late afternoon trades, the scrip was up 4.5 per cent at Rs 81 on the BSE. However, it came off from the day
