Buy Aster DM Healthcare, target price Rs 278: HDFC Securities

HDFC Securities has buy call on Aster DM Healthcare with a target price of Rs 278. The current market price of Aster DM Healthcare is Rs 250.05.

Aster DM Healthcare Ltd., incorporated in the year 2008, is a Mid Cap company (having a market cap of Rs 12485.33 Crore) operating in Hospitals & Allied Services sector.

Aster DM Healthcare Ltd. key Products/Revenue Segments include Hospital Services, Pharmaceuticals, Other Operating Revenue, Other Services, Consultancy Income for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 2699.39 Crore, down -1.83 % from last quarter Total Income of Rs 2749.77 Crore and up 13.44 % from last year same quarter Total Income of Rs 2379.63 Crore. Company reported net profit after tax of Rs 80.16 Crore in latest quarter.

Investment Rationale
The brokerage expects Revenue/EBITDA/PAT to grow at a CAGR of 9%/7%/10% over FY22-24E. The stock trades at an attractive valuation of ~9x FY24E EV/EBITDA, which represents a significant discount to its Indian peers. Such a discount could be due to the lower contribution from the India region. It believes such a high discount is unwarranted, given the stable operating performance and increase in share from the India business as more hospitals reach maturity, while being supported by a steady growth outlook in GCC. The divestment and restructuring of the GCC business remain on track and could unlock value.


Promoter/FII Holdings
Promoters held 37.88 per cent stake in the company as of 30-Jun-2022, while FIIs owned 11.44 per cent, DIIs 9.65 per cent.