Prabhudas Lilladher's research report on Aster DM Healthcare
Our FY24E and FY25E EBIDTA stand increased by ~3%. ASTER DM’s consolidated EBIDTA (post IND AS 116) grew 9% YoY (13% QoQ) to Rs 5bn; in line with our estimate. There were certain one off in Q4- Rs160mn write off related to Cayman biz along with start-up losses (Rs110mn) of units in GCC. ASTERDM has a unique business model with presence in India and an established business with strong returns in GCC. We expect 15% EBIDTA CAGR over FY23-25E, as margin in its India business will gradually improve with brownfield expansion and new hospitals ramp-up in GCC. At current market price, the stock trades at an attractive valuation of 9x FY25E EV/EBIDTA (Pre Ind As), which is at 25-50% discount to Indian peers. Timely stake sale of GCC business will re-rate and lower gap with peers.
Outlook
We maintain our ‘Buy’ rating with TP of Rs. 335/share (earlier Rs 265/share) based on 18x FY25E EV/EBIDTA to India business and 8x EV/EBIDTA to GCC business.
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