Multiple brokerages have maintained positive ratings on Aster DM Healthcare following strong Q1 performance, with The Hindu BusinessLine recommending a 'Buy' rating with a target price of ₹920 per share, while Prabhudas Lilladher maintains a buy rating with the same target price of ₹920. As per The Hindu BusinessLine, the company's current market price stands at ₹870.30, indicating potential upside of approximately ₹50 per share. Both brokerages acknowledge the merger's success but differ on valuation, with Prabhudas Lilladher valuing the combined entity at 32x EV/EBITDA for FY28E while maintaining their positive outlook on rising visibility of post-merger synergies, occupancy improvement, and margin expansion.
According to latest reports, Aster DM Healthcare's Q1 consolidated EBITDA grew 28% YoY to ₹270 crore, which was 8% above estimates, aided by strong performance across all business clusters. The company's consolidated revenue improved 22% to ₹1,310 crore, which was 6% above estimates. As per The Hindu BusinessLine, occupancy improved 300 bps to 62% led by higher IP volume growth, with total patients' volumes increasing 16% to 1.03 million and ALOS improving 4% to 3 days. The Aster merger with QCIL was completed in July 2026, positioning the company as the third largest healthcare chain by revenue and bed capacity in India. The Quality Care (QCIL) ramp-up has been on track with 32% EBITDA growth for Q1, demonstrating the success of the integration strategy.
The newly merged entity has significantly improved its financial position with net cash standing at ₹510 crore as of Q1FY27, as reported by The Hindu BusinessLine. For the combined entity, net debt stood at ₹1,160 crore, indicating a strong balance sheet position. The company's ALOS (Average Length of Stay) improved 4% to 3 days, reflecting better operational efficiency. Over FY26-28, the combined entity plans to increase bed capacity by ~18%, adding 1,824 beds - 610 beds in existing facilities and the balance through the greenfield route, supporting the company's growth trajectory and expansion plans.
Both brokerages maintain positive growth outlook for the combined entity. As reported by The Hindu BusinessLine, the combined entity's post Ind AS EBITDA is estimated to grow at 24%+ CAGR over FY26-28E to ₹3,100 crore. The brokerage has increased FY27E and FY28E EBITDA estimates by 3-5% for the combined entity, reflecting better performance visibility. The combined entity is currently trading at 30x EV/EBITDA on FY28E (adjusted for minority stake and rental). The Hindu BusinessLine maintains their 'Buy' rating with revised target price of ₹920, valuing the combined entity at 32x EV/EBITDA for FY28E, while Prabhudas Lilladher's revised target price of ₹920 per share reflects their confidence in the company's ability to capitalize on the healthcare sector's growth opportunities.
