Aster DM Healthcare Ltd (ADHL) is one of the largest private healthcare service
providers which operates in multiple GCC states and is an emerging healthcare
player in India. ADHL operates in all of the GCC states (UAE, Oman, Saudi Arabia,
Qatar, Kuwait, Bahrain and Jordan), India and the Philippines.
The company operates in multiple segments of the healthcare services industry,
including hospitals, clinics and retail pharmacies. As of September 30, 2017, the
Company had 17,408 employees including 1,417 full time doctors, 5,797 nurses,
1,752 paramedics, and 8,442 other employees (including pharmacists). GCC
operations are headquartered in Dubai, UAE, while Indian operations are
headquartered in Kochi, Kerala.

Outlook & Valuation: In terms of valuations, the pre-issue EV/EBITDA works out to
32.5x its 1HFY2018 annualized EBITDA (at the upper end of the issue price band),
which is higher compared to its peers like Apollo Hospitals Enterprise (trading at PE
22.3x -1HFY2018 annualized EBITDA). On EV/ Bed basis, ADHL is `2.4cr vs
Apollo Hospitals Enterprise’s `1.7cr. Further, last three years’ financial
performance including 1HFY18 numbers doesn’t provides confidence. Hence, we
recommend Neutral rating on the issue.

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