Aster DM Healthcare scouting for acquisitions in North India

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Thiruvananthapuram | Published: November 14, 2018 1:33:10 AM

In GCC countries, where he earned his business stripes, Dr Moopen had focused on an asset-light model, where it has leased the healthcare facilities instead of owning them.

Aster DM Healthcare, promoted by Gulf-based NRIs, is scouting for healthcare partners in North India, that match its own asset light business plans. Across India, UAE, Oman, Saudi Arabia, Qatar, Kuwait, Jordan and Bahrain and Philippines, the Rs 6,760-crore firm has a string of 20 hospitals and 112 clinics, manned by over 17,500 employees.

“Although our Indian strategy has been to go for a wide south footprint, we are currently on the lookout for a suitable healthcare partner in North India. But matching our asset-light plans, we have two criteria. One, it has to be in a big city, no tier-2 or tier-3 cities. Two, it should have large assets,” Dr Azad Moopen, founder chairman and MD, Aster DM Healthcare told FE.

In GCC countries, where he earned his business stripes, Dr Moopen had focused on an asset-light model, where it has leased the healthcare facilities instead of owning them. This was replicated in Bengaluru, in Aster CMI and Aster RV hospitals.
“It fetched higher returns on capital. In further expansion plans too, we intend to go for lease-model, instead of owning property,” he says.
For all current expansion plans, the company has sufficiently deep pockets, according to Aster top brass. It had gone for an IPO in February this year.

Meanwhile, Aster had also tied up with Afe Babolola University Ado Ekiti in Nigeria, to set up centres of excellence (CoEs) and a telemedicine unit. This helps client referrals in Aster hospitals in India and Gulf.
According to Sreenath Reddy, CFO, Aster’s huge geographic spread-out helps in risk-mitigation. Business in UAE has been the key driver in the 33% surge in revenues in the first half-yearly period of 2018-19. UAE affords a currency edge, whenever rupee went weak.
Reports Rs 11-crore net profit in Q2
Aster DM Healthcare, one of the largest private healthcare service providers in GCC countries and an emerging healthcare player in India, has logged a net profit of `11 crore for the second quarter of 2018-2019 as against Rs 0.51 crore in the corresponding quarter of 2017-2018.
In the quarter ending on September 30, 2018, revenue from operations has surged 17% to Rs 1,837 crore compared to Rs 1,566 crore. Announcing the financial results for the second quarter, through a release on Tuesday, Dr Azad Moopan, chairman and MD, Aster DM Healthcare expressed satisfaction about “the performance in a quarter, that is generally more muted because of the seasonal nature of businesses in the GCC.”

For the half-year ending September 30, 2018, the PAT has increased to Rs 23 crore compared to loss of Rs 76 crore, in the corresponding half-year in 2017-2018.
The release points out that usually there is a decline in volumes across hospitals, pharmacies and segments during the summer months in the GCC countries. H1 and H2 revenues in GCC are usually split in 45-55% but the Ebitda (Earnings before interest, tax, depreciation and amortisation) split can vary as much as 30% and 70% for H1 and H2. For the H1 of 2018-19, Aster DM Healthcare’s Ebitda grew by 40% year-on-year to Rs 249 crore compared to Rs 178 crore, in the corresponding period in the previous year.

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