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Aster DM Healthcare IPO: High valuation at current level fails to infuse optimism; Avoid - IndiaNotes.com
Aster DM Healthcare IPO: High valuation at current level fails to infuse optimism; Avoid
Hem Securities | Published: 12 Feb, 2018  | Source : IndiaNotes.com

Investment Rationale


Co have expanded to 323 operating facilities, including 19 hospitals with a total of 4,754 installed beds, as of September 30, 2017. Further, co entered into an operation and management services agreement with Rashtreeya Sikshana Samithi Trust in Bengaluru to provide operation and management services at a hospital in J P Nagar, Bengaluru. In the GCC states, the number of co’s clinics increased from 41 as of March 31, 2013 to 90 as of September 30, 2017, and the number of its retail pharmacies increased from 98 as of March 31, 2013 to 206 as of September 30, 2017. Co have a diversified portfolio of healthcare facilities, consisting of 9 hospitals, 90 clinics and 206 retail pharmacies in the GCC states, 10 multi-specialty hospitals and 7 clinics in India, and 1 clinic in the Philippines as of September 30, 2017. According to the Frost & Sullivan Report, co operate the largest chain of retail pharmacies in the UAE based on number of centres as of March 31, 2017


Valuation


Company is bringing the issue at price band of Rs 180-190 /sh at EV/EBIDTA multiple of 34-35. Although co’s business looks attractive but losses in H1FY18 with weak financial performance in FY17 & high valuation at current level fails to infuse optimism in company , hence we recommend “Avoid” on issue .

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About Hem Securities
The Hem Securities is one of the leading broking Network in India. It provides trading platform in all the leading exchanges namely - BSE, NSE, MCX , NCDEX & MCX-SX. Their mission is to build wealth for their investors by offering them best financial services through trading & investment strategies and honoring commitment with ethical & transparent business practices.

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