Buy Aster DM Healthcare, target price Rs 270: JM Financial

JM Financial has buy call on Aster DM Healthcare with a target price of Rs 270. The current market price of Aster DM Healthcare is Rs 210.65. Time period given by analyst is one year when Aster DM Healthcare Ltd. price can reach defined target.

Aster DM Healthcare Ltd., incorporated in the year 2008, is a Mid Cap company (having a market cap of Rs 10462.30 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
Aster DM’s reported revenues, in a seasonally lean 1Q, beat estimates by 12% (partly due to currency tailwinds) with a margin miss on account of post-Covid normalisation and new hospital losses. Although management expects 2Q to be the strongest for India business, 2H typically is 60% of full year EBITDA implying sequential improvement in margins hereon. While timelines for GCC restructuring remain elusive, any decision on the same is unlikely this year. Aster DM’s strategic India focus with consistent India outperformance can drive consensus upgrades thereby re-rating the stock.

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.