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You are here : IndiaNotes >> Research & Analysis >> IPOs >> Aster DM Healthcare IPO

Aster DM IPO: Subscribe the issue for long term gains

Nirmal Bang | 14 Feb, 2018  | Follow Author | Add to my Favourites 
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Valuation and Recommendation

Aster  DM  Ltd  has  shown  consistent  sales  growth  of  38%  during  FY12-17 with EBITDA growth of 16% as the company doubled its number of clinics in past two years. This has resulted in increas ed expenditure base. Further due to one-time write-off take in Saudi Arabia, the company reported loss at  PAT  level  in  FY17.  However,  we  believe  these  are  one-time  incidents. We expect Aster DM to be back to double digit EBITDA margins soon. With the  IPO  money,  the  company  intends  to  repay  Rs  564  cr  of  debt,  which would bring down the interest out go; aiding the bottom-line. We believe the  valuations  are  fair  considering  the  huge  potential  in  the  industry.

Going forward, as the company is coming out of its  investment phase, we expect Aster to report  higher growth in profitability and improvement  in margins  as  well  as  return  ratios.  At  higher  band  the  issue  is  offered  at 19.6x  FY18E  calculated  EV/EBITDA. We like the company’s strong brand equity  and  consistent  track  record.  We  recommend  investors  to subscribe the issue for long term gains.
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About Nirmal Bang

Founded in 1986 by Nirmal Bang, the Nirmal Bang is recognized as one of the largest retail broking houses in India, providing an array of financial products and services. Their retail and institutional clients have access to products such as equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS. The Group is headed by Mr. Dilip Bang and Mr. Kishore Bang.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.




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