Aster DM Healthcare Share Price Surges Over 10% Post Q2 FY25 Results

Aster DM Healthcare, a leading integrated healthcare service provider in India, has announced its financial results for the quarter ending September 30, 2024. The company’s performance reflects significant growth and operational efficiency in the 1HFY25.

Operating Margins and Core Business Performance

The overall Operating EBITDA margin for H1 FY25 stood at 19.6%, an increase from 16.1% in H1 FY24. The core hospital business demonstrated even stronger results, achieving an Operating EBITDA margin of 22.4% in H1 FY25, compared to 19.1% in the previous year. Matured hospitals, those operational for over six years, reported impressive Operating EBITDA margins of 25% in H1 FY25, up from 22% in H1 FY24, with a return on capital employed (ROCE) of 32%.

Key Hospital Metrics

Aster Whitefield Hospital in Bangalore reached approximately 67% occupancy levels, with an Average Revenue Per Occupied Bed (ARPOB) of around INR 70,000 during H1 FY25. Additionally, the Average Length of Stay (ALOS) improved to 3.2 days from 3.4 days in H1 FY24, reflecting enhanced patient management and operational efficiency.

Payor Mix and Revenue Growth

The payor mix also showed positive trends, with the insurance segment now accounting for 30% of revenue, representing a 300 basis point increase. However, this was somewhat offset by a decline in scheme business during H1 FY25. In the diagnostics segment, Aster Labs reported a 17% year-over-year revenue growth in Q2 FY25, achieving a positive EBITDA margin of 11%, up from 3.4% in Q1 FY25.

Expansion Plans

In terms of expansion, Aster DM Healthcare successfully operationalized 100 beds at MIMS Kannur in the last quarter. The company has ambitious plans to add over 1,800 beds by FY27, including a new Aster Women and Child facility in Hyderabad, which will feature 300 beds. This strategic expansion underscores Aster DM Healthcare’s commitment to enhancing its service offerings and capacity in the region.

Commenting on the performance for H1 FY25, Dr. Azad Moopen, Founder and Chairman, of Aster DM Healthcare, said: “We are pleased with the momentum built in the second quarter of FY25, which reflects our unwavering focus on operational excellence and capacity enhancement. In H1 FY25, our India business achieved 18% YoY growth, reaching INR 2,088 crores, driven by increased occupancy and growth in ARPOB. The Operating EBITDA grew by 44% YoY to INR 410 crores and net profits (post NCI) grew by 88% YoY to INR 171 crores in H1 FY25. The steady growth across our core businesses, combined with strategic cost optimization, has significantly strengthened our margins with H1FY25 Operating EBITDA margins standing at 19.6%.”

Dr Moopen further added, “As we expand, with plans to surpass ~6,800 beds by FY27, Aster DM Healthcare is well-positioned to meet the increasing demand for advanced healthcare in India. I am pleased to share that 9 Aster Hospitals are now accredited in the new Digital Standards Published by NABH signifying our commitment to Digital Transformation. Amongst them, 5 Hospitals have been accorded the highest accreditation in the Platinum category thus underscoring our leadership in digital healthcare transformation.”

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