Aster DM Healthcare’s (Aster) Q3FY23 performance exceeded our expectations on revenue front, largely driven by strong growth in GCC hospitals and pharmacies. Consolidated revenue grew 20.5% YoY to Rs31.9bn (I-Sec: Rs28.1bn). GCC hospitals posted healthy growth of 22% YoY.
Midcap valuation discount over large caps in terms of earnings yield spread is low currently at around 10 bps on a TTM basis and offers little ‘margin of safety’ (Chart 1). However, they have not yet reached the extreme optimism seen during 2017-18 where they traded at a premium to large caps.