Aster DM Healthcare - Q2FY21 Result Update - ICICI Direct

After a pandemic impacted Q1, Aster's Q2FY21 results showed a strong sequential recovery. Q2FY21 revenues grew 28.8% QoQ to Rs. 2268 crore. GCC revenues grew 26.8% QoQ to Rs. 1932 crore. India revenues also grew 38.8% QoQ (albeit down 3.7% YoY) to Rs. 415 crore. EBITDA margins expanded 385 bps QoQ to 12.0% due to better operational leverage. Subsequent EBITDA grew 89.9% QoQ to Rs. 271 crore. PAT came in at Rs. 32.9 crore vs. a loss of Rs. 83 crore in Q1FY20.

Valuation & Outlook

Despite the ongoing Covid-19 crisis having created unforeseen hurdles, the company reported a strong quarterly performance tracking normalisation of GCC business despite India operations being still impacted. Aster has a unique business model among Indian healthcare services providers with a strong established presence in GCC and India. While the India expansion remains on investment curve, firm footing and FCF generation from the GCC set-up is keeping the entire scheme of things under control, especially when the company is pursuing aggressive expansion mode in both GCC and India albeit via assets light model. Despite the capex cycle getting pushed further due to the pandemic, we are positive on the company's integrated business model and expect gradual margins and RoCE improvement on the back of higher occupancy and capacity optimisation in new assets from FY21E onwards. At current levels, we envisage favourable risk-reward matrix and maintain BUY rating with a target price of Rs. 170 (SOTP basis).

For details, click on the link below:https://www.icicidirect.com/mailimages/IDirect_AsterDM_Q2FY21.pdf

Source : Equity Bulls

Keywords