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• Revenue Growth: 15% increase, reaching INR3,138 crores in the first nine months of FY25.

• Operating EBITDA: Grew by 35% to INR613 crores with margins expanding to 19.5% in nine months FY25.

• Net Profit: Adjusted net profit grew by 65% to INR251 crores in nine months FY25.

• Material Cost: Decreased to 20.7% in nine months FY25 from 22.3% in the previous year.

• Hospital Operating EBITDA Margin: Improved to 22.3% in FY25 from 19.5% the previous year.

• Lab Business Revenue Growth: 14% year-on-year growth in nine months FY25.

• Bed Capacity: Total capacity of 5,128 beds as of December 31, 2024, with plans to add approximately 1,700 beds by FY27.

• India Revenue for Q3 FY25: Increased to INR1,050 crores, up by 11% from INR949 crores in Q3 FY24.

• Adjusted PAT for Q3 FY25: INR81 crores, a 30% year-on-year growth.

• ROCE: Increased by 470 basis points year on year, reaching 19.4%.

• Net Cash Position: INR1,014 crores as of December 31, 2024.

• Warning! GuruFocus has detected 4 Warning Sign with BOM:540975.

Release Date: February 03, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Aster DM Healthcare Ltd (BOM:540975) announced a strategic merger with Quality Care India Limited, creating one of the top three hospital chains in India with 38 hospitals and over 10,000 beds.

• The company reported a strong financial performance with a 15% revenue growth, reaching INR3,138 crores in the first nine months of FY25.

• Operating EBITDA grew by 35%, reaching INR613 crores, with margins expanding to 19.5% from 16.6% a year ago.

• The hospital business continues to grow strongly, with operating EBITDA margins improving to 22.3% in FY25, up from 19.5% the previous year.

• Aster DM Healthcare Ltd (BOM:540975) has launched the Aster Health app, enhancing patient convenience with features like appointment management and video consultations.

Negative Points

• The Kerala cluster experienced low growth due to the end of the flu season in Q2 and reduced footfalls from GCC and Maldives.

• Occupancy rates in mature hospitals are around 65-67%, with some hospitals dragging overall occupancy.

• The pharmacy segment showed muted performance with a decline in store count from 250 to 200.

• There are concerns about increased competition in Kerala, with new entrants potentially impacting market dynamics.

• The merger with Quality Care India Limited is subject to regulatory approvals, which could delay integration and realization of synergies.

Q & A Highlights

Q: What were the reasons for the low growth in the Kerala cluster this quarter? A: Alisha Moopen, Deputy Managing Director, explained that the flu season ended earlier this year compared to last year, affecting occupancy and revenue. Additionally, there was a reduction in footfalls from key regions like GCC and Maldives. Leadership changes at the flagship unit in Medcity also contributed, but improvements are expected with new leadership in place.