


As the weight of promoter pledge lifts, Aster DM is free to grow again
Subscribe to enjoy similar stories. Since the covid-19 pandemic, India’s healthcare sector has been having a dream run. Buoyed by an aging demographic with rising incomes, along with improving penetration of medical insurance and medical tourism, the Nifty Healthcare Index has outperformed the broader market by recording a 25% compound annual growth rate (CAGR) in the last five years.
Within the healthcare sector, Aster DM Healthcare Ltd has grown phenomenally. The Bengaluru-based integrated healthcare service provider has more than 5,000 beds in 19 hospitals across five states in the country and has seen the revenue grow by 22% CAGR over the last five years. Its Ebitda margin has expanded from 11% to 20%, leading to 37% CAGR growth in its operating profit.
Its stock has reflected this fundamental strength and has appreciated in tandem during the period. Ebitda is short for earnings before interest, taxes, depreciation and amortization. However, despite continued healthy fundamental growth, it has turned into a trigger-happy stagnant counter over the past year.
The separation of its Gulf Cooperation Council (GCC) business, massive dividend payouts, 99% promoter pledge, and other events have triggered intermittent spikes in the stock price. But bogged down by the heavy weight of the promoter pledge, the stock has been trending sideways since April 2024. The company announced the separation of its GCC business on 3 April 2024.
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