Aster DM Eyes To Be Among India's Top Three Hospitals After Gulf Unit Sale

Aster DM Healthcare Ltd. aspires to be "among the top three" Indian hospitals and has set aside a capex of Rs 800-850 crore for organic growth, according to its chief executive officer, Nitish Shetty.

This comes after the company sold its stake in the Gulf Cooperation Council business for a consideration of $1.01 billion after the board approved the separation of its India and Gulf units in November 2023.

The stake sale removes the long-pending overhang on the stock due to the laggard performance of GCC.

"The focus is going to be on Indian business now," Shetty told NDTV Profit's Tamanna Inamdar. The company has around 4,900 beds in 19 hospitals across five states, viz., Kerala, Karnataka, Maharashtra, Andhra Pradesh and Telangana. "Going forward, we have plans to add around 2,500 beds in Kerala and Karnataka, of which 60% would be brownfield expansion." The company is also planning to have pharmacies and labs around hospitals to create an integrated healthcare system, he said.

In addition to expansion plans in the current regions, Shetty said that they are also actively looking for opportunities to expand their footprint to North India, specifically Uttar Pradesh.

The company said that it has set aside Rs 800-850 crore for organic expansion. However, with regards to foraying into a new geography, they expect the inorganic growth to be funded by performance over the next one to two years.

This is because the company, in its exchange filing, stated that it is considering the distribution of 70–80% of the upfront consideration of $903 million from the GACC stake sale as a dividend.

The dividend is expected to be in the range of Rs 110 per share to Rs 120 per share, as the company stated earlier.

Shares of the company were trading 2.145 higher at Rs 434.65 as of 1:36 p.m., compared to a 1.94% fall in the benchmark Sensex.

All seven analysts tracking the stock recommend a 'buy' on the stock, according to Bloomberg data.