Aster DM Healthcare - GCC Stake Sale To Unlock Value: Prabhudas Lilladher

Prabhudas Lilladher Report

Aster DM Healthcare Ltd. board has approved the much awaited GCC stake sale at reasonable valuations, that will unlock value for shareholders. Proper capital allocation strategy will be a key to scale-up India operations.

Conversely, Aster DM India’s Ebitda increased sharply over last three years (30% compound annual growth rate over FY20-23).

We estimate 23% Ebitda CAGR from India biz over FY23-26E aided by scale up in margins, healthy average revenue per occupied bed and bed additions. Our FY24E/25E India business Ebitda stand increased by 1-3%.

At current market price, adjusted for GCC stake the India business is trading at 19 times and 15 times enterprise value/Ebitda on FY25E and FY26E respectively which is at 15- 30% discount to listed peers.

We maintain ‘Buy’ rating with revised target price of Rs 430 (earlier Rs 345) valuing India hospital segment at 20 times (18 times earlier) enterprise value/Ebitda on Sept 2025E Ebitda.

Timely closure of GCC divestment and utilisation of proceeds will be key monitorable in near term.

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