At a Glance
Aster DM Healthcare’s Q1 FY26 results came in with revenue of ₹1,078 Cr (+7.6% YoY) and net profit ₹94 Cr (+9% QoQ). Margins held at 19%, showing operational discipline. But the stock’s 87x P/E is treating it like Apollo’s sibling, while promoter pledging (40.7%) and book value 8.6x scream caution. In short: The patients are fine, but the stock might need an IV drip.
Introduction
From Kerala to Kuwait, Aster DM Healthcare runs hospitals like Starbucks runs coffee chains. Clinical excellence, cost control, and GCC dominance are its USP. But the market isn’t just about patient care—it cares about profit margins, debt, and whether promoters are secretly pawning shares. Despite strong operations, the valuation is rich, and the pledge percentage makes investors sweat harder than ICU nurses.
Business Model (WTF Do They Even Do?)
- Segments: Hospitals & clinics (94% of revenue), pharmacies, and ancillary services.
- Regions: GCC countries dominate revenue, with India catching up.
- Strength: Integrated model from primary to quaternary care.
- Weakness: Heavy reliance on pledged shares, inconsistent cash flows.
- Fun Fact: They treat millions, but can they treat their high P/E fever?
Financials Overview
| ₹ Cr | Q1 FY26 | Q4 FY25 | YoY |
|---|---|---|---|
| Revenue | 1,078 | 1,000 | +7.6% |
| EBITDA | 202 | 182 | +11% |
| OPM % | 19% | 18% | Stable |
| Net Profit | 94 | 86 | +9% |
| EPS (₹) | 1.65 | 1.58 | +4% |
Comment: Healthy growth, but still not Apollo-level.
Valuation
- P/E Method:
- EPS (TTM) ≈ ₹6.3
- Industry P/E ≈ 50x
- Fair Value ≈ ₹315
- EV/EBITDA Method:
- EBITDA ≈ ₹786 Cr (TTM)
- EV/EBITDA ≈ 15x
- Fair Value ≈ ₹450–500
- DCF (Quick):
- Growth 12%, WACC 10%
- FV ≈ ₹480–520
👉 Fair Value Range: ₹450–520. At ₹593, the stock is slightly overpriced.
What’s Cooking – News, Triggers, Drama
- Q1 FY26: Solid revenue and margin stability.
- Capex: ₹580 Cr investment in a 500-bed hospital lease—expansion mode.
- M&A: Asset transfer of ₹80 Cr from subsidiary.
- Triggers: Rising GCC medical tourism, Indian hospital expansion.
- Drama: Promoter pledge (40.7%) = investor anxiety.
Balance Sheet
| ₹ Cr (Mar 2025) | Value |
|---|---|
| Total Assets | 6,606 |
| Liabilities | 3,279 |
| Net Worth | 2,929 |
| Borrowings | 2,018 |
Roast: The balance sheet is recovering, but promoter pledge is the elephant in the hospital ward.
Cash Flow – Sab Number Game Hai
| ₹ Cr | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Operating | 1,314 | 1,834 | 158 |
| Investing | -563 | -951 | 6,015 |
| Financing | -686 | -817 | -6,358 |
Comment: FY25’s investing cash flow looks suspiciously high due to asset monetization. Operating cash collapsed.
Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 10.5% |
| ROCE | 10.7% |
| P/E | 87x |
| PAT Margin | 18.7% |
| D/E | 0.7 |
Roast: ROE barely double digits but the market prices it like a luxury hospital suite.
P&L Breakdown – Show Me the Money
| ₹ Cr | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Revenue | 3,699 | 4,138 | 4,214 |
| EBITDA | 575 | 746 | 786 |
| PAT | 475 | 212 | 349 |
Roast: PAT took a dip in FY24 but FY25 saw recovery. Q1 FY26 is on track.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Apollo Hospitals | 21,794 | 1,445 | 74x |
| Max Healthcare | 7,028 | 1,132 | 109x |
| Fortis Healthcare | 7,783 | 840 | 76x |
| Aster DM Healthcare | 4,214 | 349 | 87x |
Roast: Aster trades at Apollo-like multiples but lacks Apollo-like dominance.
Miscellaneous – Shareholding, Promoters
- Promoters: 40.4% (high pledge 40.7%)
- FIIs: 19.6% (falling)
- DIIs: 25.3% (rising)
- Public: 14.4%
Promoter pledge remains the biggest concern. DIIs are stepping in, but FII exit is worrying.
EduInvesting Verdict™
Aster DM Healthcare is growing steadily with GCC dominance and Indian expansion. Margins are healthy, revenue is improving, and new projects will add capacity. However, promoter pledge and high P/E create valuation risk. Debt is manageable, but cash flows need stabilization.
SWOT Analysis
- Strengths: Strong GCC presence, diversified hospitals, cost control.
- Weaknesses: High pledge, volatile cash flows, low historical growth.
- Opportunities: Indian healthcare boom, medical tourism.
- Threats: Regulatory risks, competition, pledge-triggered volatility.
Final Word: Operationally fit, financially borderline, and valuation-wise on steroids. Investors must decide if they like this hospital’s treatment plan.
Written by EduInvesting Team | 30 July 2025SEO Tags: Aster DM Healthcare, Hospitals, Q1 FY26 Results
