Buy Aster DM Healthcare; target of Rs 430: Prabhudas Lilladher

Prabhudas Lilladher's research report on Aster DM Healthcare

Aster DM Healthcare (ASTERDM) board has approved the much awaited GCC stake sale at reasonable valuations, that will unlock value for shareholders. Proper capital allocation strategy will be a key to scale-up India operations. Conversely, ASTERDM India’s EBITDA increased sharply over last 3 years (30% CAGR over FY20-23). We estimate 23% EBITDA CAGR from India biz over FY23-26E aided by scale up in margins, healthy ARPOB and bed additions. Our FY24E/25E India business EBITDA stand increased by 1-3%. At current market price, adjusted for GCC stake the India business is trading at 19x and 15x EV/EBITDA on FY25E and FY26E respectively which is at 15- 30% discount to listed peers.

Outlook

We maintain ‘Buy’ rating with revised TP of Rs.430 (earlier Rs. 345) valuing India hospital segment at 20x (18x earlier) EV/EBITDA on Sept 2025E EBITDA. Timely closure of GCC divestment and utilization of proceeds will be key monitorable in near term.

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