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- 01 Sep 2022
- ICICIdirect Research
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ASTER DM REITERATES INDIA EXPANSION PLANS IN AGM
ASTERDM - 498 Change: 1.95 (0.39 %)News: During AGM, the management said the company’s focus was on raising share of revenues from India existing business through better sweating of assets. India contributed 24% of the group EBITDA in FY22 and Aster DM’s strategy is to grow this to ~ 40% of overall revenue in the next three years. The management is deploying strategies involving a healthy mix of focused cluster approaches, new revenue streams like low capex operations, management of hospitals, along with inorganic growth. The strategy is to build larger facilities in Tier 1 cities while developing affordable healthcare options in smaller towns on an asset-light model.
View: Aster DM is planning to add around 1300 beds in the next two to three years, in Kasaragod, Trivandrum and Bangalore. In GCC, Aster DM is making small investments in Saudi on a low capex model as the company is focused on the idea to shift the focus for a larger proportion of the business to come from India and optimising the core GCC business. We remain positive on Aster’s integrated business model and growth strategy and expect revenues to grow at a CAGR of 8% in FY22-24E and EBITDA margins to improve from 14.5% in FY22 to 16.7% in FY24E.
Impact: Positive.