Aster DM's revenues steady while margins dropASTERDM - 251 Change: 20.05 (8.69 %)
News: Revenues de-grew 2% QoQ to Rs 2662 crore as 10% QoQ growth in the India business to Rs 669 crore was offset by 5% QoQ de-growth in GCC business to Rs 2111 crore. In GCC, Hospitals declined 3% QoQ to Rs 913 crore, Clinics de-grew 19% QoQ to 538 crore and Pharmacy grew 8% QoQ to 660 crore. EBITDA margins contracted 598 bps QoQ to 11% while EBITDA de-grew 37% QoQ to Rs 292 crore. Subsequently, net profit declined by 70% QoQ to Rs 68.5 crore.
View: Aster DM posted in-line revenues while margins were a significant miss with I-direct estimates. During Q1, Aster started operations management of the 140-bed Aster mother hospital in Areekode in Kerala. On a blended level, Occupancy improved to 60% in Q1FY23 from 58% last quarter and ARPOBD has declined to Rs 69,250 in Q1FY23 from 73,700 last quarter. Aster owns a unique business model among Indian healthcare services providers with strong established presence in GCC and India. We are positive on Aster’s integrated business model and Aster’s growth strategy for India to add brownfield facilities with low capex investment but high potential opportunity. We expect gradual margins and RoCE improvement on the back of higher occupancy and capacity optimisation in newer assets.