Buy Aster DM Healthcare; target of Rs 500 Prabhudas Lilladher

Prabhudas Lilladher's research report on Aster DM Healthcare

ASTER DM Healthcare’s (ASTERDM) Q2 consolidated EBITDA grew strongly by 51% YoY to Rs2.2bn, 18% above our estimate. Our FY25-27E EBITDA estimate stands increased by 4-9% as we factor in higher margins across clusters. ASTERDM India’s EBITDA has increased sharply over the last 3 years (29% CAGR over FY22-24). We estimate 27% EBITDA CAGR over FY24-27E aided by scale-up in margins, healthy ARPOB and bed additions.

Outlook

At current market price, the stock is trading at 26x and 21x EV/EBITDA on FY26E and FY27E, respectively, adjusted for minority stake and rental. We maintain ‘Buy’ rating with revised TP of Rs500, valuing at 26x (23x earlier) EV/EBITDA on Sep2026E EBITDA as we roll forward. Utilization of proceeds, possible merger with any PE player and timely expansion will be key monitorables in the near term.

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