ICICI Securities: Aster DM Healthcare Logs Lesser Than Expected Covid-19 Impact
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ICICI Securities Report
Aster DM Healthcare Ltd.’s Q1 FY21 performance, with better occupancy in Gulf Corporation Council (GCC) hospitals, was above our estimates as Covid-19 impact was lower than expected on occupancy.
Overall occupancy was down by 9% YoY to 47% in Q1 FY21. Consolidated revenue declined 13.2% YoY to Rs 17.6 billion (our estimate Rs 14.7 billion) due to 19.2% drop in India hospitals and 26.3% drop in GCC Clinics.
Ebitda margin dropped 290 basis points to 8.1% but was higher than estimated with effective cost control. The occupancy level has significantly improved from lows of April 20 and management expects double digit margin Q3 FY21 onwards.
We believe the company’s approach of asset-light expansion and an improving margin trajectory (90 basis points over FY20-FY22E) would aid positive free cash flow generation.
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