Summary
Aster DM Healthcare Limited - Q3 FY26 Earnings Call Summary Monday, February 2, 2026, 11:00 AM IST
Event Participants
Executives 6 Alisha Moopen (Deputy MD), Hitesh Dhaddha (Chief IR & M&A Officer), Ramesh Kumar (COO), Sunil Kumar M R (CFO), T J Wilson (Non-Executive Director), Varun Khanna (Group MD & CEO, QCIL)
Analysts 8 Amey Chalke, Damayanti Kerai, Harith Ahmad, Kashish Thakur, Kunal Randeria, Nancy Yadav, Shreenarayan, Tausif Shaikh
Financials & KPIs (Combined Proforma Platform - Aster + QCIL)
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹2,366 crores | +15% YoY, driven by 9% growth in patient volumes and 8% improvement in Inpatient ARPP. |
| Operating EBITDA | ₹503 crores | +22% YoY, outperforming revenue growth due to cost efficiencies and improved case mix. |
| EBITDA Margin | 21.0% | +130 bps YoY, reflecting higher clinical complexity and procurement centralization. |
| ROCE | 21.0% | Stable return profile despite ongoing capacity additions across 28 cities. |
| Inpatient ARPP | - | +8-10% YoY range across the first three quarters of FY26. |
| CONGO-T Mix | 54.4% | +150 bps YoY, highlighting the shift toward high-acuity specialties (Oncology, Neuro, etc.). |
| Total Bed Capacity | 10,620+ beds | Added 560+ beds over the past year; pipeline includes 4,000+ additional beds. |
Geographic & Segment Commentary
- Kerala Cluster (Aster): Revenue grew 20% YoY to ₹629 crores, anchored by a 11% rise in inpatient volumes and 64% growth in Medical Value Travel (MVT). Operational discipline led to 25.4% margins (excluding Kasargod), with strong performance in the flagship Aster Medcity and MIMS Calicut.
- Karnataka & Maharashtra (K&M) Cluster: Revenue rose 7% YoY to ₹383 crores, with a high 17% increase in Inpatient ARPP despite a 9% volume dip. Softness was attributed to the discontinuation of a state scheme at Aster Aadhar and temporary clinician movements in Bengaluru.
- Quality Care India Limited (QCIL): Delivered revenue of ₹1,181 crores (+17.3% YoY) with EBITDA margins expanding 265 bps to 23.7%. Growth was driven by an 80.1% cash/insurance payor mix and a 12.2% increase in ARPOB to ~₹47,000.
- Ancillary Businesses: Aster Labs achieved an EBITDA turnaround to 12.2% margins in YTD FY26 (+35% YoY external growth). Wholesale pharmacy margins improved to 2.2% following the outsourcing of loss-making segments.
Company-Specific & Strategic Commentary
- Merger Integration: NCLT application filed Dec 11, 2025; shareholder meeting scheduled for Feb/March 2026. Effective completion expected in Q1 FY27, targeting ₹2,000+ crore combined procurement scale.
- Clinical Excellence & Tech: Scaled Robotics Program with 5 Intuitive Surgical systems and 5 Elekta LINACs. High-acuity focus drove Oncology revenue up 27% YoY, now contributing 11% of total Aster revenue.
- Capacity Expansion: 4,000+ bed pipeline (2,300 Aster, 1,700 QCIL) through ₹2,000 crore investment. Focus remains on Tier-2/Tier-3 markets (e.g., Kasargod, Nagercoil) where demand for complex care is under-penetrated.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Merger Completion | Q1 FY27 | Subject to shareholder and NCLT approvals; process is in the final regulatory phase. |
| Long-term Margin | 24% - 25% | Targeted within 2-3 years through scale, synergies, and improved specialty mix. |
| Capacity Target | 14,710+ beds | Phased expansion involving both greenfield (Trivandrum, Hyderabad) and brownfield projects. |
| Synergy Benefit | 10% - 15% EBITDA upside | Expected over 2-3 years post-merger, primarily from procurement and clinical talent optimization. |
Risks & Constraints
| Risk | Context |
|---|---|
| Seasonality & Clinical Attrition | Q3 saw volume moderation in K&M due to seasonality and clinician movements; management is actively hiring 100+ clinicians to mitigate this. |
| Material Cost Intensity | Shift to Oncology and Cardiology (high-end consumables) pressured gross margins; mitigated by higher EBITDA per bed. |
| Greenfield Gestation | New units like Kasargod (₹2-2.5cr monthly burn) and upcoming Hyderabad/Trivandrum projects may temporarily dilute margins during ramp-up. |
Q&A Highlights
Clinician Attrition in Bengaluru
- Question: What caused the 9% volume decline in Karnataka and how is it being addressed? (Tausif Shaikh)
- Answer: Softness was due to clinician movements in specific micro-markets and scheme rationalization; however, ARPP IP grew 17%. Management is onboarding “big name” replacements and expanding high-acuity services (Ramesh Kumar).
QCIL Performance Drivers
- Question: Is QCIL’s margin improvement driven by standalone efforts or Aster synergies? (Amey Chalke)
- Answer: Current gains are standalone QCIL synergies (KIMS/CARE/Evercare) and improved payor mix (80% cash/insurance). Aster-QCIL procurement synergies of 10-15% will only trigger post-merger (Varun Khanna).
New Hospital Breakeven
- Question: What is the trajectory for the newly commissioned Kasargod hospital? (Damayanti Kerai)
- Answer: The unit reached 400 OP/day and 55 beds in Month 3 despite ₹31,000 ARPOB. Monthly losses have narrowed to ₹2-2.5 crores; breakeven is expected within one quarter (Sunil Kumar).
Strategic Focus on Oncology
- Question: How will the increasing mix of Oncology affect material costs? (Shreenarayan)
- Answer: Oncology grew 27% this quarter. While it carries higher material costs (immunotherapy/targeted therapy), it provides high EBITDA per bed and is a primary growth engine (Sunil Kumar).
Key Takeaway
Aster DM Healthcare delivered a resilient Q3 FY26, with the combined proforma platform (Aster + QCIL) reporting 15% revenue growth to ₹2,366 crores and 22% EBITDA growth. Strategic focus on high-acuity “CONGO-T” cases (54.4% mix) and a turnaround in ancillary segments like Aster Labs (12.2% margin) offset temporary volume softness in the Karnataka cluster. The company is in the final stages of its merger with Quality Care India Limited, which is expected to conclude in Q1 FY27 and unlock significant procurement synergies. Management remains committed to a massive 4,000+ bed expansion pipeline, largely targeting Tier-2/3 markets to democratize specialized care. Despite short-term margin pressures from new capacity (Kasargod) and high-intensity material costs in Oncology, the platform is tracking toward a 24-25% long-term margin profile.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: