Aster DM Healthcare (ASTDM)

CMP: | 141 Target: | 170 (21%) Target Period: 12 months BUY

November 11, 2020 Strong sequential recovery, GCC back to near normal After a pandemic impacted Q1, Aster’s Q2FY21 results showed a strong

sequential recovery. Q2FY21 revenues grew 28.8% QoQ to | 2268 crore. GCC revenues grew 26.8% QoQ to | 1932 crore. revenues also grew 38.8% QoQ (albeit down 3.7% YoY) to | 415 crore. EBITDA margins

expanded 385 bps QoQ to 12.0% due to better operational leverage. Subsequent EBITDA grew 89.9% QoQ to | 271 crore. PAT came in at | 32.9 Particulars

crore vs. a loss of | 83 crore in Q1FY20. Particular Amount Market Capitalisation | 7036 crore

Result Update Result Strong RoCE in GCC despite aggressive expansion Debt (FY20) | 5605 crore Cash (FY20) | 34 crore Aster derives ~81% of revenues from GCC countries. In the last six years, it EV | 12606 crore expanded its hospitals, clinics, pharmacy count by ~2x. However, despite 52 week H/L (|) 182/78 aggressive expansion, RoCE has stayed healthy (hospitals- 12% (established Equity capital | 499.5 crore hospitals- 25%), clinics- 21% and pharmacies- 44%) due to 1) assets light Face value | 10 model, 2) integrated business model, 3) faster occupancy owing to strong Key Highlights brand equity, 4) healthy ARPOB and 5) targeted strategy. We believe RoCE would improve further due to continuing improvement in occupancy and  Q2 results show strong sequential operational leverage at new assets. The GCC region has shown recovery tracking normalisation of commendable resilience in the ongoing Covid-19 pandemic crisis, which GCC business  We expect gradual margins, ROCE augurs well for healthcare players like Aster to return to normalcy earlier. improvement on the back of higher Expanding presence in India occupancy, capacity optimisation in new assets from FY21E onwards Notwithstanding being a late entrant, Aster has a network of ~13 hospitals and nine clinics, mainly in Tier-II and Tier-III cities in India. The company is  Maintain BUY Price performance now looking to expand its network in metros and Tier-I cities, which is likely to improve its overall ARPOB. However, due to continuous expansion and 250 12000 few specific unforeseen issues, the RoCE in India is just 3%, which is 200 10000 dragging its overall RoCE. To improve the return ratios, the company is 8000 150 focusing on an assets light model for future expansion. 6000

100 Valuation & Outlook 4000

Retail Equity Research Equity Retail 50 2000

– Despite the ongoing Covid-19 crisis having created unforeseen hurdles, the 0 0

company reported a strong quarterly performance tracking normalisation of

Feb-18 Feb-19 Feb-20

Nov-18 Nov-19

Aug-19 Aug-20

GCC business despite India operations being still impacted. Aster has a Aug-18

May-18 May-19 May-20 unique business model among Indian healthcare services providers with a Aster DM(L.H.S) NSE500(R.H.S)

strong established presence in GCC and India. While the India expansion remains on investment curve, firm footing and FCF generation from the GCC Research Analyst set-up is keeping the entire scheme of things under control, especially when Siddhant Khandekar the company is pursuing aggressive expansion mode in both GCC and India [email protected] Securities ICICI albeit via assets light model. Despite the capex cycle getting pushed further Mitesh Shah due to the pandemic, we are positive on the company’s integrated business [email protected] model and expect gradual margins and RoCE improvement on the back of higher occupancy and capacity optimisation in new assets from FY21E Sudarshan Agarwal onwards. At current levels, we envisage favourable risk-reward matrix and [email protected] maintain BUY rating with a target price of | 170 (SOTP basis). Key Financial Summary

| Crore FY20 FY21E FY22E FY23E CAGR FY20-23E (%) Revenues 8738.1 9031.9 9963.2 10927.8 7.7 EBITDA 1257.2 1090.9 1428.2 1625.5 8.9 EBITDA margins (%) 14.4 12.1 14.3 14.9 Net Profit 276.6 155.2 496.5 671.4 34.4

EPS (|) 5.5 3.1 9.9 13.4 PE (x) 25.4 45.3 14.2 10.5 EV to EBITDA (x) 9.9 10.6 7.7 6.2 RoCE (%) 7.1 5.2 9.1 10.9 ROE 8.5 4.5 12.7 14.6 Source: ICICI Direct Research; Company

Result Update | Aster DM Healthcare ICICI Direct Research

Exhibit 1: Variance Analysis Q2FY21 Q2FY20 Q1FY21 YoY (%) QoQ (%) Comments YoY growth amid 12.7% growth in GCC segment mainly due to pent-up Revenue 2,267.7 2,086.7 1,760.6 8.7 28.8 demand post Covid-19 and increase in expatriate patients volume amid travel restriction Raw Material Expenses 686.6 615.8 584.2 11.5 17.5 Employee Expenses 714.1 728.8 624.5 -2.0 14.4 YoY decline mainly due to cost rationalisation Improved due to higher lab expenses and increase in normal course of Other Expenditure 595.9 497.5 409.2 19.8 45.6 business Operating Profit (EBITDA) 271.1 244.7 142.7 10.8 89.9 EBITDA (%) 12.0 11.7 8.1 23 bps 385 bps Improvement in margins mainly due to decline in employee cost Interest 74.6 88.4 80.3 -15.7 -7.1 Depreciation 152.9 149.0 154.7 2.6 -1.2 Other Income 7.9 4.1 6.5 92.3 21.8 PBT before EO & Forex 51.5 11.4 -85.7 351.2 LP Forex & EO 0.0 0.0 0.0 0.0 0.0 PBT after Exceptional Items 51.5 11.4 -85.7 351.2 LP Tax 10.3 5.0 3.9 108.1 166.7 PAT before MI 41.2 6.5 -89.6 537.7 LP MI 9.4 3.8 -5.7 150.4 LP Delta vis-à-vis EBITDA mainly due to lower interest cost, depreciation Net Profit 32.9 3.0 -82.9 1,001.2 LP and higher other income Key Metrics YoY growth impacted amid Covid-19, improved QoQ growth amid India 415.0 431.0 299.0 -3.7 38.8 increased patients footfall partially amid pent-up demand and increase in Covid patients YoY growth amid pent-up demand post Covid-19 and increased local GCC 1,932.0 1,715.0 1,524.0 12.7 26.8 patients volume amid travel restriction Source: ICICI Direct Research

Exhibit 2: Change in Estimates FY21E FY22E (| Crore) Old New % Change Old New % Change Revenue 9,412.6 9,031.9 -4.0 10,506.1 9,963.2 -5.2 EBITDA 811.1 1,090.9 34.5 1,473.3 1,428.2 -3.1 EBITDA Margin (%) 8.6 12.1 346 bps 14.0 14.3 31 bps PAT -71.9 155.2 LP 480.9 496.5 3.2 EPS (|) -1.4 3.1 LP 9.6 9.9 3.2 Source: ICICI Direct Research

ICICI Securities | Retail Research 2 Result Update | Aster DM Healthcare ICICI Direct Research

Conference Call Highlights

 Capex in advanced phase: , Whitefield (Bangalore), Kolhapur

 Net debt: | 2476 crore = Net debt (India): | 353 crore + net debt (GCC): US$ 288 million

 Cost optimisation measures in H1FY21 for manpower, material costs and other direct expenses showing benefits

 GCC – Some countries seeing second Covid wave but with less intensity and no lockdowns  GCC revival seen from June onwards (including Q2FY21) after a Covid-impacted April-May 2020  Exception to normal summer seasonality in GCC (exodus of expats) due to pandemic restrictions helped Q2 performance  Not much contribution from Covid in GCC  Elective surgeries also saw a sequential uptick in GCC regions  GCC Pharmacy – Some retail footfall drop seen, but management expects near normal footfall from Q3

 Aster Labs has done ~26,500 Covid tests  India – 15% of India revenues (| 415 crore) Covid based  56% revenue contribution from cluster  Kannur + RV (Bangalore) – very high occupancies  Recovery trend to continue in Q3

 Home care  India: Presence in eight locations, good year for homecare, strong growth in North Kerala  Wahat: Additional contribution of | 34 crore over last year; has good margins  GCC – Expanding but some lack of nurses seen (amid Philippine’s travel restrictions)

 Constant currency hospital revenue, EBITDA growth of 3%, 2% respectively in H1FY21

 Other expenditure higher: Lab related/ sanitisation expenses; could continue but to drop gradually

 Nothing in inorganic expansion currently

ICICI Securities | Retail Research 3 Result Update | Aster DM Healthcare ICICI Direct Research

Exhibit 3: Quarterly Financials (| crore) Q 1F Y 19 Q 2F Y 19 Q 3F Y 19 Q 4F Y 19 Q 1F Y 20 Q 2F Y 20 Q 3F Y 20 Q 4F Y 20 Q 1F Y 21 Q 2F Y 21 Y oY (% ) Q oQ (% ) Total Operating Income 1774.7 1836.9 2150.1 2201.0 2028.4 2086.7 2321.6 2301.3 1760.6 2267.7 8.7 28.8 Raw Material E xpenses 552.0 549.9 654.8 663.1 627.3 615.8 695.1 697.3 584.2 686.6 11.5 17.5 % of Revenue 31.1 29.9 30.5 30.1 30.9 29.5 29.9 30.3 33.2 30.3 77 bps -290 bps Gross Profit 1222.6 1287.1 1495.3 1537.9 1401.2 1470.9 1626.5 1604.0 1176.4 1581.1 7.5 34.4 Gross Profit Margin (% ) 68.9 70.1 69.5 69.9 69.1 70.5 70.1 69.7 66.8 69.7 -77 bps 290 bps Employee Expenses 633.1 657.2 708.4 689.5 707.1 728.8 730.1 737.9 624.5 714.1 -2.0 14.4 % of Revenue 35.7 35.8 32.9 31.3 34.9 34.9 31.4 32.1 35.5 31.5 -343 bps -398 bps Other E xpenditure 465.7 504.5 523.6 498.1 470.5 497.5 511.4 462.2 409.2 595.9 19.8 45.6 % of Revenue 26.2 27.5 24.4 22.6 23.2 23.8 22.0 20.1 23.2 26.3 244 bps 304 bps Total E xpenditure 1650.8 1711.5 1886.9 1850.7 1804.9 1842.0 1936.6 1897.4 1617.9 1996.7 8.4 23.4 % of Revenue 93.0 93.2 87.8 84.1 89.0 88.3 83.4 82.4 91.9 88.0 -23 bps -385 bps E B ITDA 123.8 125.4 263.2 350.3 223.6 244.7 385.0 403.9 142.7 271.1 10.8 89.9 EBITDA Margin (% ) 7.0 6.8 12.2 15.9 11.0 11.7 16.6 17.6 8.1 12.0 23 bps 385 bps Other Income 17.3 16.2 5.8 7.5 3.3 4.1 3.9 26.6 6.5 7.9 92.3 21.8 Interest 40.1 39.5 56.4 55.4 87.7 88.4 71.5 112.1 80.3 74.6 -15.7 -7.1 Depreciation 73.8 75.8 78.9 78.0 126.0 149.0 139.8 171.1 154.7 152.9 2.6 -1.2 P B T 27.3 26.3 133.7 224.5 13.0 11.4 177.7 147.3 -85.7 51.5 351.2 -160.1 Total Tax 11.7 10.2 16.7 4.4 2.2 5.0 8.2 -0.1 3.9 10.3 108.1 166.7 Tax rate (% ) 42.7 38.6 12.5 2.0 17.1 43.4 4.6 0.0 -4.5 20.0 NA NA PAT 12.3 11.0 100.3 209.2 3.1 3.0 139.0 131.1 -82.9 32.9 1001.2 PAT Margin (% ) 0.7 0.6 4.7 9.5 0.2 0.1 6.0 5.7 -4.7 1.4 913.4 LP E P S (|) 0.2 0.2 2.0 4.2 0.1 0.1 2.8 2.6 -1.7 0.7 Source: ICICI Direct Research, Company

ICICI Securities | Retail Research 4 Result Update | Aster DM Healthcare ICICI Direct Research

Company Background Aster DM Healthcare (Aster) commenced its operations in 1987 as a single doctor clinic in Dubai established by Dr . The company was incorporated in 2008 in a reorganisation to facilitate the growth of operations, subsequent to which operations in the GCC states and India were consolidated. Aster is one of the largest private healthcare service providers, which operate in multiple GCC states based on number of hospitals and clinics besides an emerging presence in India. The company currently operates in all of the GCC states, which comprise the (UAE), Oman, Saudi Arabia, Qatar, Kuwait, Bahrain and Jordan (which is classified as a GCC state as part of the company’s GCC operations), India and the Philippines. Its GCC operations are headquartered in Dubai (UAE) and Indian operations are headquartered in , Kerala. Aster operates in multiple segments of the healthcare industry, including hospitals, clinics and retail pharmacies and provide healthcare services to patients across economic segments in several GCC states through various brands such as Aster, Medcare and Access. Aster and other brands are widely recognised in the GCC states both by healthcare professionals and patients. The company has a diversified portfolio of healthcare facilities, consisting of 12 hospitals, 108 clinics and 238 retail pharmacies in the GCC states, 13 multi-specialty hospitals and nine clinics in India as of FY20. According to the Frost & Sullivan Report, the company operates the largest chain of retail pharmacies in the UAE based on number of centres as of FY19. It has an employee base of 21091 employees as of FY20, including 3086 doctors, 7263 nurses and 10742 other employees (including pharmacists). A majority of the company’s hospitals and clinics provide secondary and tertiary healthcare services to patients. In addition to providing core medical, surgical and emergency services, some of the company’s hospitals provide complex and advanced quaternary healthcare in various specialties, including cardiology, oncology, radiology, ophthalmology, neurosciences, paediatrics, gastroenterology, orthopaedics and critical care services. In all, five of the company’s hospitals, one clinic and one diagnostic centre have obtained Joint Commission International (JCI) accreditation. Of the total revenues from operations for FY20, hospital segment accounted for 51%, clinic segment accounted for 23% and retail pharmacy segment accounted for 26%. The company’s operations in India, which primarily consist of hospitals, accounted for 19% of total revenues from operations for FY20.

ICICI Securities | Retail Research 5 Result Update | Aster DM Healthcare ICICI Direct Research

Exhibit 4: Revenues to grow at CAGR of 8% over FY20-23E Exhibit 5: EBITDA & EBITDA margins trend 14.3% 12000 CAGR 7.7% 10928 1800 14.4% 1626 16% CAGR 13.6% 9963 1600 142814.9% 14% 10000 9032 10.8% 12.1% 8738 1400 9.1% 1257 7963 12% 1200 1091 8000 6721 10% 5931 1000 863 8% 6000 5250 800 8.5% 610 (%) 6%

(| crore) (| 600 445 4000 332 400 5.6% 4% 2000 200 2% 0 0% 0 FY16 FY17 FY18 FY19 FY20 FY21EFY22EFY23E FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E Revenues (| crore) EBITDA (| crore) EBITDA margins (%)

Source: ICICI Direct Research, Company Source: ICICI Direct Research, Company

Exhibit 6: PAT & PAT margins trend Exhibit 7: RoE & RoCE trend 800 7% 20.0 5.0% 671 700 3.9% 6.1% 6% 15.0 14.6 4.2% 12.7 600 5% 10.0 10.4 10.9 497 9.3 8.3 8.5 9.1 500 3.2% 4% 7.1 5.0 5.0 5.4 5.9 4.55.2 400 333 3% 277 0.0 0.8 264 1.7% (%) 300 2% FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E (| crore) (| 155 -5.0 200 1.7%102 1% 100 0% -10.0 -14.1 0 -1% -15.0 -100 FY16-1.1%FY17 FY18 FY19 FY20 FY21EFY22EFY23E -2% -20.0 -59 Net Profit (| crore) Net Profit margins (%) ROCE (%) ROE (%)

Source: ICICI Direct Research, Company Source: ICICI Direct Research, Company

Exhibit 8: Valuation Particulers Valuation Matrix Multiple (x) EV (| cr)

GCC Mature Hospitals EV/EBITDA 8.0 4,180 India Mature Hospitals EV/EBITDA 8.0 1,812 GCC New Hospitals EV/Sales 1.0 473 India New Hospitals EV/Sales 1.0 354 Clinics EV/Sales 1.0 2,562 Pharmacies EV/Sales 1.0 3,003 Net Debt FY22E (| cr) 3,105.1 Minority Interest 594.1 Targeted MCap (| cr) 8,685 No of shares (cr) 50.0 Per Share Value (|) 170 Source: ICICI Direct Research, Company

Exhibit 9: Summary Revenues Growth Adj. EPS Growth P/E EV/EBITDA RoNW RoCE (| crore) (%) (|) (%) (x) (X) (%) (%) FY20 8738 9.7 5.5 -17.0 25.4 9.9 8.5 7.1 FY21E 9032 3.4 3.1 -43.9 45.3 10.6 4.5 5.2 FY22E 9963 10.3 9.9 219.9 14.2 7.7 12.7 9.1 FY23E 10928 9.7 13.4 35.2 10.5 6.2 14.6 10.9 Source: ICICI Direct Research, Company

ICICI Securities | Retail Research 6 Result Update | Aster DM Healthcare ICICI Direct Research

Exhibit 10: Shareholding Pattern (in %) Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 P romoter 37.8 37.8 37.9 37.9 37.9 O thers 62.2 62.2 62.1 62.1 62.1 Source: ICICI Direct Research, Company

ICICI Securities | Retail Research 7 Result Update | Aster DM Healthcare ICICI Direct Research

Financial Summary

Exhibit 11: Profit & Loss (| crore) Exhibit 12: Cash Flow Statement (| crore) (Year-end March) FY20 FY21E FY22E FY23E (Year-end March) FY20 FY21E FY22E FY23E Revenues 8,738.1 9,031.9 9,963.2 10,927.8 Profit/(Loss) after taxation 284.2 155.2 496.5 671.4 Growth (%) 9.7 3.4 10.3 9.7 Add: Depreciation & Amortization 585.9 613.4 602.8 630.8 Raw Material Expenses 2,635.5 2,771.9 2,989.0 3,278.3 Net Increase in Current Assets -555.5 140.8 -383.4 -401.0 Employee Expenses 2,903.9 3,189.9 3,327.7 3,649.9 Net Increase in Current Liabilities 378.2 -27.2 246.8 263.8 Other Expenditure 1,941.5 1,979.1 2,218.3 2,374.0 Others 530.4 309.1 252.3 209.5 Total Operating Expenditure 7,480.9 7,941.0 8,535.0 9,302.3 Net cash flow from operating activities1,223.3 1,191.4 1,214.9 1,374.4 EBITDA 1,257.2 1,090.9 1,428.2 1,625.5 (Inc)/dec in Fixed Assets -741.5 -100.0 -400.0 -400.0 Growth (%) -13.2 30.9 13.8 (Inc)/dec in Investments -0.1 0.0 0.0 0.0 Interest 359.7 309.1 252.3 209.5 Others 29.1 64.2 70.6 77.7 Depreciation 585.9 613.4 602.8 630.8 CF from investing activities -712.5 -35.8 -329.4 -322.3 Other Income 37.9 32.0 39.9 43.7 Inc / (Dec) in Equity Capital -120.5 0.0 0.0 0.0 PBT before Exceptional Items 349.5 200.4 613.0 829.0 Proceeds/(Repayment) Loan -217.4 -463.2 -936.9 -713.2 Less: Forex & Exceptional Items 19.6 0.0 0.0 0.0 Dividend & Dividend Tax -9.7 0.0 0.0 0.0 PBT 329.8 200.4 613.0 829.0 Others -327.2 -309.1 -252.3 -209.5 Total Tax 15.4 24.1 73.6 99.5 CF from financing activities -674.8 -772.3 -1,189.2 -922.7 PAT before MI 314.4 176.4 539.5 729.5 Net Cash flow -164.0 383.3 -303.6 129.4 Minority Interest 38.1 21.3 43.2 58.4 Opening Cash 341.1 177.1 560.4 256.8 PAT 276.6 155.2 496.5 671.4 Closing Cash 177.1 560.4 256.8 386.2 Adjusted PAT 276.6 155.2 496.5 671.4 FCF 481.7 1,091.4 814.9 974.4 Growth (%) -17.0 -43.9 219.9 35.2 Source: ICICI Direct Research EPS 5.5 3.1 9.9 13.4 EPS (Adjusted) 5.5 3.1 9.9 13.4 Source: ICICI Direct Research

Exhibit 13: Balance Sheet (| crore) Exhibit 14: Key Ratios (| crore) (Year-end March) FY20 FY21E FY22E FY23E (Year-end March) FY20 FY21E FY22E FY23E Equity Capital 499.5 499.5 499.5 499.5 Per share data (|) Reserve and Surplus 2,772.6 2,927.8 3,424.3 4,095.7 EPS 5.5 3.1 9.9 13.4 Total Shareholders fund 3,272.1 3,427.4 3,923.9 4,595.2 Cash EPS 5.5 3.1 9.9 13.4 Total Debt 5,604.7 5,141.5 4,204.6 3,491.3 BV 65.5 68.6 78.6 92.0 Deferred Tax Liability 155.2 170.7 187.8 206.5 DPS 0.0 0.0 0.0 0.0 Minority Interest 446.4 491.0 540.1 594.1 Cash Per Share 41.2 53.4 65.5 78.1 Long term Provisions 327.3 360.0 396.0 435.6 Operating Ratios (%) Other Non Current Liabilities 173.2 190.5 209.6 230.6 Gross Profit 69.8 69.3 70.0 70.0 Source of Funds 9,978.8 9,781.0 9,461.8 9,553.3 EBITDA margins 14.4 12.1 14.3 14.9 Gross Block - Fixed Assets 8,110.8 8,210.8 8,610.8 9,010.8 Net Profit margins 3.2 1.7 5.0 6.1 Accumulated Depreciation 2,055.9 2,669.3 3,272.1 3,902.8 Inventory days 40.1 33.6 33.6 33.6 Net Block 6,054.9 5,541.4 5,338.7 5,107.9 Debtor days 98.8 93.0 93.0 93.0 Capital WIP 736.0 736.0 736.0 736.0 Creditor days 54.0 46.5 46.5 46.5 Net Fixed Assets 6,790.8 6,277.4 6,074.7 5,843.9 Assets Turnover 1.1 1.1 1.2 1.2 Goodwill on Consolidation 1,068.7 1,068.7 1,068.7 1,068.7 Return Ratios (%) Investments 34.4 34.4 34.4 34.4 RoE 8.5 4.5 12.7 14.6 Inventory 961.0 830.5 916.1 1,004.8 RoCE 7.1 5.2 9.1 10.9 Cash 177.1 560.4 256.8 386.2 RoIC 7.4 5.6 9.8 11.8 Debtors 2,366.4 2,301.1 2,538.4 2,784.1 Valuation Ratios (x) Loans & Advances & Other CA 579.6 634.5 695.0 761.6 P/E 25.4 45.3 14.2 10.5 Total Current Assets 4,084.1 4,326.5 4,406.3 4,936.7 EV / EBITDA 9.9 10.6 7.7 6.2 Creditors 1,293.9 1,150.2 1,268.8 1,391.7 EV / Revenues 1.4 1.3 1.1 0.9 Provisions & Other CL 1,165.1 1,281.6 1,409.8 1,550.7 Market Cap / Revenues 0.8 0.8 0.7 0.6 Total Current Liabilities 2,459.0 2,431.8 2,678.6 2,942.4 Price to Book Value 2.2 2.1 1.8 1.5 Net Current Assets 1,625.1 1,894.7 1,727.7 1,994.3 Solvency Ratios LT L& A, Other Assets 427.3 470.1 517.1 568.8 Debt / Equity 1.7 1.5 1.1 0.8 Deferred Tax Assets 32.5 35.8 39.3 43.3 Debt/EBITDA 4.5 4.7 2.9 2.1 Application of Funds 9,978.8 9,781.0 9,461.8 9,553.3 Current Ratio 1.6 1.5 1.5 1.5 Source: ICICI Direct Research Source: ICICI Direct Research

ICICI Securities | Retail Research 8 Result Update | Aster DM Healthcare ICICI Direct Research

Exhibit 15: ICICI Direct universal Coverage (Healthcare) Company I-Direct CMP TPRating M Cap EPS (|) PE(x) RoCE (%) RoE (%) Code (|) (|) (| cr) FY19 FY20 FY21E FY22E FY19 FY20 FY21EFY22E FY19 FY20 FY21E FY22E FY19 FY20 FY21EFY22E Ajanta Pharma AJAPHA 1537 1,960 Buy 13409 43.5 53.4 62.7 73.8 35.3 28.8 24.5 20.8 21.8 24.7 25.4 24.5 17.1 18.1 18.4 18.6 Alembic PharmaALEMPHA 953 1,170 Buy 18731 31.4 46.3 59.7 48.4 30.3 20.6 16.0 19.7 19.6 21.0 22.2 16.9 21.8 27.1 22.9 16.2 Apollo Hospitals APOHOS 2160 1,970 Buy 30057 17.0 23.3 -11.4 28.7 127.3 92.6 NA 75.2 8.8 10.2 3.9 15.2 7.1 9.7 -4.6 10.5 Aurobindo PharmaAURPHA 807 1,025 Buy 47268 41.9 48.8 58.4 65.4 19.3 16.5 13.8 12.3 15.9 17.2 18.2 18.0 17.7 17.0 15.0 14.5 Biocon BIOCON 415 500 Buy 49848 6.2 5.8 8.4 15.8 66.9 71.4 49.7 26.3 10.9 10.2 11.7 18.2 12.2 10.4 13.2 20.3 Cadila Healthcare CADHEA 414 555 Buy 42373 18.1 14.0 19.8 22.1 22.9 29.6 20.9 18.7 12.8 10.7 13.6 14.3 17.8 13.8 15.7 15.4 Cipla CIPLA 737 925 Buy 59429 18.6 19.2 27.6 30.4 39.7 38.4 26.7 24.3 10.9 12.0 15.5 15.5 10.0 9.8 12.6 12.5 Divi's Lab DIVLAB 3335 4,205 Buy 88523 51.0 51.9 73.0 89.9 65.4 64.3 45.6 37.1 25.5 23.9 28.4 28.7 19.4 18.8 22.2 22.3 Dr Reddy's Labs DRREDD 4807 6,000 Buy 79923 114.7 121.9 168.4 194.4 41.9 39.4 28.5 24.7 10.7 9.6 17.5 19.3 13.6 13.0 15.5 15.5 Glenmark Pharma GLEPHA 479 635 Buy 13514 26.9 26.4 36.5 37.6 17.8 18.2 13.1 12.7 15.3 12.7 14.9 14.1 13.5 12.2 14.5 13.1 Hikal HIKCHE 172 230 Buy 2119 8.4 8.1 10.2 12.2 20.6 21.2 16.9 14.0 14.3 12.8 13.6 14.9 13.6 12.2 13.5 14.2 Ipca Laboratories IPCLAB 2028 2,665 Buy 25723 34.9 47.6 93.0 89.3 58.2 42.6 21.8 22.7 15.0 17.6 27.1 21.7 14.2 16.6 24.7 19.3 Jubilant Life JUBLIF 683 850 Buy 10876 54.9 59.9 54.4 70.3 12.4 11.4 12.6 9.7 14.3 14.4 14.7 16.9 17.8 16.6 13.2 14.7 Lupin LUPIN 887 985 Hold 40206 16.5 -12.7 22.6 38.4 53.6 NA 39.2 23.1 9.4 9.7 8.9 13.5 5.4 -4.6 7.6 11.6 Narayana HrudalayaNARHRU 343 405 Buy 7002 2.9 6.4 -4.2 8.3 118.0 54.0 NA 41.1 7.7 11.0 -2.4 12.8 5.5 11.4 -8.3 14.2 Natco Pharma NATPHA 880 950 Buy 16032 35.4 25.3 31.0 29.7 24.9 34.8 28.4 29.6 21.3 14.0 16.1 14.2 18.5 12.2 13.4 11.6 Sun Pharma SUNPHA 502 585 Buy 120408 15.9 16.8 25.5 23.1 31.7 29.9 19.6 21.7 10.3 10.0 11.4 12.4 9.2 8.9 12.9 10.5 Syngene Int. SYNINT 542 635 Buy 21696 8.3 10.3 9.5 13.2 65.6 52.7 56.9 41.2 14.8 14.5 12.4 15.8 16.8 15.7 14.9 17.2 Torrent Pharma TORPHA 2549 3,135 Buy 43132 48.9 60.6 71.0 85.9 52.1 42.1 35.9 29.7 14.2 15.4 18.0 20.2 17.5 21.2 21.0 21.3 Shalby SHALIM 92 100 Hold 997 2.9 2.6 4.2 4.8 31.5 36.1 22.1 19.2 6.8 7.2 5.8 7.8 4.1 3.5 5.3 5.9 Aster DM ASTDM 141 170 Buy 7036 6.7 5.5 3.1 9.9 21.1 25.4 45.3 14.2 8.3 7.1 5.2 9.1 10.4 8.5 4.5 12.7 Indoco Remedies INDREM 257 335 Buy 2364 -0.3 2.6 9.3 14.8 NA 98.1 27.6 17.3 0.9 4.6 11.4 15.6 -0.4 3.5 11.4 15.7 Caplin Point CAPPOI 454 605 Buy 3438 23.3 28.4 33.5 43.5 19.5 16.0 13.6 10.4 34.6 26.5 26.9 28.1 27.9 22.7 21.5 22.3 Granules India GRANUL 373 460 Buy 9236 9.5 12.4 21.4 25.2 39.1 30.0 17.5 14.8 11.8 15.2 22.9 23.1 15.5 16.7 22.6 21.2 Laurus Labs LAULAB 274 390 Buy 14670 1.7 4.8 16.0 17.7 156.4 57.5 17.1 15.5 7.7 13.0 30.4 28.0 6.0 14.4 33.8 27.9 Source: ICICI Direct Research, Bloomberg

ICICI Securities | Retail Research 9 Result Update | Aster DM Healthcare ICICI Direct Research

RATING RATIONALE ICICI Direct endeavours to provide objective opinions and recommendations. ICICI Direct assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Buy, Hold, Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock

Buy: >15%; Hold: -5% to 15%; Reduce: -5% to -15%; Sell: <-15%

Pankaj Pandey Head – Research [email protected]

ICICI Direct Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected]

ICICI Securities | Retail Research 10 Result Update | Aster DM Healthcare ICICI Direct Research

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ICICI Securities | Retail Research 11