Prabhudas Lilladher recommends buying Aster DM Healthcare with a target price of Rs 400
Prabhudas Lilladher recommends buying Aster DM Healthcare with a target price of Rs 400, as per their research report dated August 1, 2024.
Key Highlights:
- Strong Q1 Performance: Aster DM Healthcare’s consolidated EBITDA grew by 37% year-on-year to Rs 1.7 billion.
- India Operations: The company’s EBITDA in India has increased significantly over the last three years, showing a 29% compound annual growth rate (CAGR) from FY22 to FY24.
- Future Growth: They estimate a 30% EBITDA CAGR from FY24 to FY26, driven by better margins, healthy average revenue per occupied bed (ARPOB), and adding more beds.
- Valuation: At the current market price, the stock is trading at 21 times its EV/EBITDA for FY26, adjusted for minority stakes and rental costs.
Outlook: Prabhudas Lilladher maintains a ‘Buy’ rating with a target price of Rs 400, valuing the company at 23 times its FY26 EV/EBITDA. Key factors to watch are the use of funds and timely expansion.
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