Aster DM Healthcare sees record growth in Q2 and H1 FY25 amid expansion plans

Aster DM Healthcare, one of India’s leading healthcare service providers, announced robust financial results for the second quarter (Q2) and half-year (H1) of FY25. The company reported a notable 18% year-on-year (YoY) increase in revenue for H1 FY25, reaching INR 2,088 crores, compared to INR 1,772 crores in H1 FY24. Q2 FY25 also saw revenue rise by 16% YoY to INR 1,086 crores, up from INR 934 crores in Q2 FY24.

The operating earnings before interest, taxes, depreciation, and amortization (EBITDA) for H1 FY25 grew by 44% YoY, amounting to INR 410 crores. In comparison, H1 FY24’s operating EBITDA stood at INR 285 crores. In Q2 FY25, the company’s operating EBITDA surged by 48% YoY to INR 233 crores. This growth translated to an EBITDA margin of 21.4% for Q2 FY25, a substantial rise from the 16.8% recorded in Q2 FY24.

Profit and Margin Expansion

Aster DM Healthcare’s pre-tax profit (PBT) soared by 134% YoY to INR 284 crores for H1 FY25, significantly higher than the INR 121 crores achieved during H1 FY24. The net profit after non-controlling interest (NCI) climbed by 88% YoY, reaching INR 171 crores, compared to INR 91 crores in the previous period. Dr. Azad Moopen, the Founder and Chairman of Aster DM Healthcare, emphasized the company’s commitment to enhancing operational efficiencies and expanding its capacity. He noted that the momentum built in Q2 FY25 showcased their strategic focus on cost optimization and core business expansion.

Expansion Plans and Digital Transformation Drive Performance

The company outlined plans to increase its bed capacity to over 6,800 by FY27, indicating a strategic focus on meeting India’s rising demand for advanced healthcare services. The expansion includes the launch of a new 300-bed Aster Women and Child facility in Hyderabad. Dr. Moopen highlighted that nine Aster hospitals had achieved accreditation under the National Accreditation Board for Hospitals and Healthcare Providers (NABH) digital standards, with five hospitals attaining the prestigious platinum category.

Aster DM Healthcare’s India segment showed significant improvement in its core hospital business, with an operating EBITDA margin reaching 22.4% in H1 FY25, up from 19.1% in H1 FY24. Established hospitals, operating for over six years, demonstrated a strong EBITDA margin of 25%, contributing to a return on capital employed (ROCE) of 32%. The Aster Whitefield Hospital in Bangalore reported a 67% occupancy rate, with an average revenue per occupied bed (ARPOB) of INR 70,000 in H1 FY25.

Growth in Ancillary Services and Future Prospects

Aster DM Healthcare’s ancillary services also showed promising growth, with Aster Labs posting a 17% YoY revenue increase in Q2 FY25. The labs segment delivered a positive EBITDA margin of 11% in Q2 FY25, up from 3.4% in Q1 FY25. The company successfully operationalised an additional 100 beds at MIMS Kannur in the last quarter and plans to add 1,800 beds by FY27.

Expert Insight: Dr. Moopen’s Vision for Digital Transformation and Growth

Dr. Moopen expressed optimism about the company’s digital transformation journey and its capacity-building initiatives. He attributed the company’s profitability and efficiency gains to its strategic focus on technology and cost optimization. According to him, these initiatives align with Aster DM Healthcare’s mission to remain at the forefront of India’s healthcare sector, ensuring comprehensive and accessible medical services for a growing population.

Additional Details: Share Performance Analysis

As of October 24, 2024, Aster DM Healthcare’s stock (BSE: 540975, NSE: ASTERDM) has shown positive sentiment in the market, reflecting investor confidence following the strong Q2 FY25 results. Analysts point out that the company’s expansion strategy and improving margins are likely to sustain stock momentum in the upcoming quarters.