Buy Aster DM Healthcare, target price Rs 260: JM Financial

JM Financial has buy call on Aster DM Healthcare with a target price of Rs 260. The current market price of Aster DM Healthcare is Rs 217.4.

Aster DM Healthcare, incorporated in the year 2008, is a Mid Cap company (having a market cap of Rs 10864.41 Crore) operating in Hospitals & Allied Services sector.

Aster DM Healthcare 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 31-12-2022, the company has reported a Consolidated Total Income of Rs 3200.67 Crore, up 12.91 % from last quarter Total Income of Rs 2834.72 Crore and up 20.28 % from last year same quarter Total Income of Rs 2661.09 Crore. Company has reported net profit after tax of Rs 158.04 Crore in latest quarter.

The company’s top management includes Dr.Azad Moopen, Mr.James Mathew, Mr.Chenayappillil John George, Dr.Layla Mohamed Hassan Ali Almarzooqi, Prof.Biju Varkkey, Mr.Wayne Earl Keathley, Mr.Daniel Robert Mintz, Mr.Shamsudheen Bin Mohideen Mammu Haji, Mr.Anoop Moopen, Mr.T J Wilson, Ms.Alisha Moopen, Mr.Sridar Arvamudhan Iyengar. Company has Deloitte Haskins & Sells as its auditors. As on 31-12-2022, the company has a total of 50 Crore shares outstanding.

Investment Rationale
Aster is focusing on Saudi markets with Sanad operating at ~10% margin. Aster has also launched their pharmacy business in Saudi, partnering with Al Hokair group to create a network of 250 pharmacies over the next 5 years. The management stated that GCC business will be sold/ seperated from India business completely and binding bids are expected to be received by 1Q24. Aster’s consistent India outperformance, Saudi focus, GCC growth and restructuring progress gives us comfort on our positive stance.

Promoter/FII Holdings
Promoters held 37.88 per cent stake in the company as of 31-Dec-2022, while FIIs owned 42.49 per cent, DIIs 8.93 per cent.