Aster DM Healthcarebsmedia.business-standard.com/_media/bs/data/...ICICI Securities | Retail...

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Result

Update

CMP: | 124 Target: | 160 (29%) Target Period: 12 months

Aster DM Healthcare (ASTDM)

BUY

June 25, 2020

Steady numbers despite Covid-19 disturbances…

Q4FY20 revenues grew 4.6% YoY to | 2301 crore. EBITDA margins

expanded 163 bps YoY to 17.6% mainly due to lower other expenses on

Ind-AS adjustment. Subsequent EBITDA grew 15.3% YoY to | 404 crore.

However, PAT fell 37.4% YoY to | 131 crore. Delta vis-a-vis EBITDA was

mainly due to higher interest & depreciation expenses due to Ind-AS 116.

Strong RoCE in GCC despite aggressive expansion

Aster derives ~81% of revenues from GCC countries. In the last six years it

expanded its hospitals, clinics, pharmacy count by ~2x. However, despite

aggressive expansion, RoCE has stayed healthy (hospitals- 12%

(established hospitals- 25%), clinics- 21% and pharmacies- 44%) due to 1)

assets light model, 2) integrated business model, 3) faster occupancy

owing to strong brand equity, 4) healthy ARPOB and 5) targeted strategy.

We believe RoCE would improve further due to continuing improvement in

occupancy and operational leverage at new assets. The GCC region has

shown commendable resilience in the ongoing Covid-19 pandemic crisis,

which augurs well for healthcare players like Aster to return to normalcy

earlier.

Expanding presence in India

Being a late entrant notwithstanding, Aster has a network of ~13 hospitals

and nine clinics, mainly in Tier-II and Tier-III cities in India. The company is

now looking to expand its network in metros and Tire I cities, which is

likely to improve its overall ARPOB. However, due to continuous expansion

and few specific issues (floods in Kerala), the RoCE in India is just 3%,

which is dragging its overall RoCE. To improve the return ratios, the

company is focusing on an assets light model for future expansion.

Valuation & Outlook

The ongoing Covid 19 crises has have created unforeseen hurdles in what

has been a smooth journey leveraging on a blend of large hospitals,

secondary clinics and a well established pharmacy business in the GCC

region. Aster owns a unique business model among Indian healthcare

services providers with strong established presence in GCC and India.

While the India expansion remains on investment curve, firm footing and

FCF generation from the GCC set-up is keeping the entire scheme of things

under control, especially when the company is pursuing aggressive

expansion mode in both GCC and India albeit via assets light model.

Despite the capex cycle getting pushed further due to the pandemic, we

are positive on the company’s integrated business model and expect

gradual margins and RoCE improvement on the back of higher occupancy

and capacity optimisation in new assets from FY21E onwards. At current

levels, we envisage favourable risk-reward matrix and maintain BUY rating

with a target price of | 160 (SOTP basis).

Key Financial Summary

| C ro re F Y19 F Y20 F Y21E F Y22E C AG R F Y20-22E (%)

R evenues 7962.7 8738.1 9412.6 10506.1 9.7

E B ITD A 862.8 1257.2 811.1 1473.3 8.3

E B ITD A margins (% ) 10.8 14.4 8.6 14.0

Net P rofit 333.1 276.6 -71.9 480.9 31.9

E P S (|) 6.7 5.5 -1.4 9.6

P E (x) 18.6 22.4 -86.0 12.9

M.C ap/ R evenues (x) 0.8 0.7 0.7 0.6

E V to E B ITD A (x) 10.0 8.8 13.0 6.7

R oC E (% ) 8.3 7.5 2.6 9.7

R O E 10.4 8.5 -2.2 13.1

Source: ICICI Direct Research; Company

Particulars

P a rticu la r

Market C apita lisation

D ebt (F Y 20)

C ash (F Y 20)

E V

52 week H /L (|) 182/78

E quity capita l

F ace value | 10

Am ount

| 6184 crore

| 5112 crore

| 34 crore

| 11261 crore

| 499.5 crore

Key Highlights

The company performed well on a

full year basis with FY20 revenues

growing 9.7% YoY to | 8738 crore.

India business (19% of revenues)

grew 22.8% over FY19 and GCC

grew 7.8% YoY.

We expect gradual margins, ROCE

improvement on the back of higher

occupancy and capacity optimization

in new assets from FY21E onwards

At the current level we envisage

favourable risk-reward matrix

Maintain BUY Research Analyst

Siddhant Khandekar

[email protected]

Mitesh Shah, CFA

[email protected]

Sudarshan Agarwal

[email protected]

ICICI Securities | Retail Research 2

ICICI Direct Research

Result Update | Aster DM Healthcare

Exhibit 1: Variance Analysis

Q4FY20 Q4FY19 Q3FY20 YoY (%) QoQ (%) Comments

Revenue 2,301.3 2,201.0 2,321.6 4.6 -0.9 Disruption amid Covid-19 (C19) impacted growth

Raw Material Expenses 697.3 663.1 695.1 5.2 0.3

Employee Expenses 737.9 689.5 730.1 7.0 1.1

Consultant Doctor cost 171.6 156.3 180.8 9.8 -5.1

Other Expenses 290.6 341.8 330.6 -15.0 -12.1

Operating Profit (EBITDA) 403.9 350.3 385.0 15.3 4.9 Improvement in margins mainly due to implementation of Ind-AS 116

EBITDA (%) 17.6 15.9 16.6 163.5 96.7

Interest 112.1 55.4 71.5 102.5 56.8YoY increase mainly due to implementation of Ind-AS 116 and MTM

losses

Depreciation 171.1 78.0 139.8 119.5 22.4 YoY increase mainly due to implementation of Ind-AS 116

Other Income 26.6 7.5 3.9 255.7 577.8

PBT before EO & Forex 147.3 224.5 177.7 -34.4 -17.1

Forex & EO 1.3 0.0 18.4 NA -93.1

PBT after Exceptional Items 146.0 224.5 159.3 -34.9 -8.3

Tax -0.1 4.4 8.2 -101.1 -100.6

PAT before MI 146.1 220.0 151.1 -33.6 -3.3

MI 15.2 10.5 12.3 44.6 23.5

Net Profit 131.1 209.2 139.0 -37.4 -5.7 Delta vis-à-vis EBITDA mainly due to implementation of Ind-AS 116

Source: ICICI Direct Research

Exhibit 2: Change in Estimates

Comments

(| Crore) Old New % Change Old New % Change

Revenue 9,658.6 9,412.6 -2.5 10,607.8 10,506.1 -1.0

EBITDA 1,327.3 811.1 -38.9 1,479.0 1,473.3 -0.4

EBITDA Margin (%) 13.7 8.6 -512 bps 13.9 14.0 8 bps C19 related disruption expected to impact FY21 margins

PAT 409.7 -71.9 -117.6 584.7 480.9 -17.7Change mainly in sync with operational performance and

implementation of IndAS 116

EPS (|) 8.1 -1.4 -117.8 11.6 9.6 -17.0

FY21E FY22E





Conference Call Highlights

Covid-19 impact in the last two weeks of March – normally,

maximum revenues come in March

Q4 financials

GCC - Contribution from Wahat (home care business) ~| 30

crore and ramped up operation for Qusais hospital ~| 16 crore

(a) PAT reduced due to forex loss | 25 crore

India - ramped up operation for MIMS hospital Kannur by ~|

31 crore and RV Hospital Bangalore by ~| 23 crore

(a) EBITDA reduced due to loss in RV Hospital Bangalore

~| 5 crore and Aster Labs ~| 1 crore in addition to

Covid-19 impact

A 35% decline in revenues in April, started recovery in May with

the three weeks of June being encouraging; they expect Q2FY21 to

be flat YoY with normalisation from Q3FY21 onwards

Clinic segment was impacted higher than hospitals and pharmacy

business;

Some of the company’s facilities have been converted to Covid

centres. Additionally, hotels for Covid treatment have also been

acquired

Medical value travel (MVT) that accounts for ~6% of Indian

business was impacted by travel restrictions. Majority impact on

Bangalore, Kochi and Kolkata. MVT in fact had started witnessing a

decline from January 2020 itself

Q1FY21 material costs to be higher due to PPE kits, medical

devices costs amid Covid-19

Cost control/cash conservation measures adopted

Reduced overheads, rent renegotiation, manage & optimize

staff costs, right size human resource and increase efficiency

All planed capex at hold (some cancelled) - except Sharjah (|

60 crore), Bangalore Whitefield (| 20 crore) and Kolhapur (| 10

crore). Thus, capex for H1FY21 would be ~|100 crore

The company has put on hold/cancelled certain capital

expenditures such as Aster hospital in Dubai (65 beds), Oman

on hold; In India Chennai facility is on hold; Aster Bangalore on

hold

Receivable collections at: 1) GCC – The government had directed

insurers to start releasing money. Hence, collection is more than

50% of usual but still lower than expected due to work from home

by insurers employees. The management expects it to normalise in

Q2FY21

April Occupancy at 52% in GCC and 38% in India; Elective cases

are back on track. Currently occupancy is 10% lower than

normalcy in GCC, 2) in India, it is still a challenge

India lockdown impacted both OP and IP volumes. However,

post the initial period, occupancy levels at Kerala are much

higher than others

Hospital electives stopped for two weeks (fell 70%) but recovered

fast; Covid cases help keep revenues intact in Q1 and support fixed




cost payment; pharmacy segment did well enough to partially

offset decline in revenues

Oman and Saudi Arabia did not initially allow private treatment of

Covid patients but has now allowed

Aster Labs in Bangalore tied up with local hospitals for Covid-19

RT-PCR testing (ICMR approved)

FY21 margins expectation: GCC Hospitals – 14-15%, Clinics to

remain stable as FY20 level, Pharmacy – 11% and India hospitals to

be ~13-14% (FY20 – 11.2%)

There was a | 180 crore increase in finance costs : Of that, | 130

crore was due to Ind-AS, | 40 crore due to MTM loss, | 10 crore

due to increase in debt

The company hedges 50% of its GCC debt (US$340 million)

India hospitals – Konnur facility started in March 2019 with

breakeven in four months, reached peak occupancy; pricing was

kept lower in first year; and was expected to increase in FY21 but

due to COVID the pricing has been maintained for now

Aster RV Bangalore expected breakeven in Q4; but due to

COVID it again came into losses

Debt to EBITDA to be 2x in the next two to three years

A 150-200 bps improvement in margins expected due to cost

rationalisation in the next two to three years




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 Y oY (% ) Q oQ (% )

Total O perating Income 1774.7 1836.9 2150.1 2201.0 2028.4 2086.7 2321.6 2301.3 4.6 -0.9

R aw Materia l E xpenses 552.0 549.9 654.8 663.1 627.3 615.8 695.1 697.3 5.2 0.3

% of R evenue 31.1 29.9 30.5 30.1 30.9 29.5 29.9 30.3 17 bps 36 bps

G ross P rofit 1222.6 1287.1 1495.3 1537.9 1401.2 1470.9 1626.5 1604.0 4.3 -1.4

G ross P rofit Margin (% ) 68.9 70.1 69.5 69.9 69.1 70.5 70.1 69.7 -17 bps -36 bps

E mployee E xpenses 633.1 657.2 708.4 689.5 707.1 728.8 730.1 737.9 7.0 1.1

% of R evenue 35.7 35.8 32.9 31.3 34.9 34.9 31.4 32.1 74 bps 62 bps

O ther E xpenditure 465.7 504.5 523.6 498.1 470.5 497.5 511.4 462.2 -7.2 -9.6

% of R evenue 26.2 27.5 24.4 22.6 23.2 23.8 22.0 20.1 -254 bps -194 bps

Total E xpenditure 1650.8 1711.5 1886.9 1850.7 1804.9 1842.0 1936.6 1897.4 2.5 -2.0

% of R evenue 93.0 93.2 87.8 84.1 89.0 88.3 83.4 82.4 -164 bps -97 bps

E B ITD A 123.8 125.4 263.2 350.3 223.6 244.7 385.0 403.9 15.3 4.9

E B ITD A Margin (% ) 7.0 6.8 12.2 15.9 11.0 11.7 16.6 17.6 164 bps 97 bps

O ther Income 17.3 16.2 5.8 7.5 3.3 4.1 3.9 26.6 255.7 577.8

Interes t 40.1 39.5 56.4 55.4 87.7 88.4 71.5 112.1 102.5 56.8

D epreciation 73.8 75.8 78.9 78.0 126.0 149.0 139.8 171.1 119.5 22.4

P B T 27.3 26.3 133.7 224.5 13.0 11.4 177.7 147.3 -34.4 -17.1

Total Tax 11.7 10.2 16.7 4.4 2.2 5.0 8.2 -0.1 -101.1 -100.6

Tax rate (% ) 42.7 38.6 12.5 2.0 17.1 43.4 4.6 0.0 NA NA

P AT 12.3 11.0 100.3 209.2 3.1 3.0 139.0 131.1 -37.4 -5.7

P AT Margin (% ) 0.7 0.6 4.7 9.5 0.2 0.1 6.0 5.7 -40.1 -4.9

E P S (|) 0.2 0.2 2.0 4.2 0.1 0.1 2.8 2.6

Source: ICICI Direct Research, Company




Company Background

Aster DM Healthcare Ltd (Aster) commenced its operations in 1987 as a

single doctor clinic in Dubai established by Dr Azad Moopen. 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 United Arab Emirates (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 Kochi, 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.




Exhibit 4: Revenues to grow at CAGR of 10% in FY20-22E


Exhibit 5: EBITDA & EBITDA margins trend


Exhibit 6: PAT & PAT margins trend


Exhibit 7: RoE & RoCE trend


Exhibit 8: Valuation

P a rticu le rs V a lua tion Ma trix Mu ltip le (x ) EV (| cr)

G C C Mature Hospita ls E V /E B ITD A 8.0 4,010

India Mature Hospita ls E V /E B ITD A 8.0 2,097

G C C New Hospita ls E V /S ales 1.0 815

India New Hospita ls E V /S ales 1.0 258

C linics E V /S ales 1.0 2,390

P harmacies E V /S ales 1.0 2,870

Net D ebt F Y 22E (| cr) 3,723.4

Minority Interes t 540.1

Targeted MC ap (| cr) 8,177

No of shares (cr) 50.0

P e r S ha re V a lue (|) 160


Exhibit 9: Summary

R e ve nue s G rowth Ad j. EP S G rowth P /EEV /EBITDA R oNW R oC E

(| cro re ) (%) (|) (%) (x) (X ) (%) (%)

F Y 19 7963 18.5 6.7 26.0 18.6 10.0 10.4 8.3

F Y 20 8738 9.7 5.5 -17.0 22.4 8.8 8.5 7.5

F Y 21E 9413 7.7 -1.4 -126.0 -86.0 13.0 -2.2 2.6

F Y 22E 10506 11.6 9.6 -768.7 12.9 6.7 13.1 9.7


5931.3

6721.2

7962.7

8738.1

9412.6

10506.1

0.0

2000.0

4000.0

6000.0

8000.0

10000.0

12000.0

FY17 FY18 FY19 FY20 FY21E FY22E

Revenues (| crore)

CAGR 13.8%CAGR 9.7%

331.9

610.5

862.8

1257.2

811.1

1473.3

5.6%

9.1%

10.8%

14.4%

8.6%

14.0%

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

200

400

600

800

1000

1200

1400

1600


(%

)

(|

crore)

EBITDA (| crore) EBITDA margins (%)

101.8

264.3

333.1

276.6

-71.9

480.9

1.7%

3.9%

4.2%

3.2%

-0.8%

4.6%

-2%

-1%

0%

1%

2%

3%

4%

5%

-100

0

100

200

300

400

500

600


(%

)

(|

crore)

Net Profit (| crore) Net Profit margins (%)

0.8

5.9

8.37.5

2.6

9.7

5.4

9.3

10.4

8.5

-2.2

13.1

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0


ROCE (%)




Exhibit 10: Recommendation History vs. Consensus

Source: ICICI Direct Research; Bloomberg

Exhibit 11: Top 10 Shareholders

Source: ICICI Direct Research, Bloomberg

Exhibit 12: Shareholding Pattern


25.0

35.0

45.0

55.0

65.0

75.0

85.0

95.0

105.0

0

50

100

150

200

250

Jun-20

May-20

Apr-20

Mar-20

Feb-20

Jan-20

Dec-19

Nov-19

Oct-19

Sep-19

Aug-19

Jul-19

Jul-19

May-19

May-19

Apr-19

Feb-19

Jan-19

Jan-19

Dec-18

Nov-18

Oct-18

Sep-18

Aug-18

Jul-18

Jun-18

May-18

Apr-18

Mar-18

(%

)(|

)

Price Idirect target Consensus Target Mean % Consensus with BUY

R a nk Inve sto r Na m e F iling Da te % O /S P osition (m ) C ha ng e

1 Union Investment Luxembourg S A 31-Mar-20 37.4 186.85m (1.9)m

2 O lympus C apital As ia Inv 31-Mar-20 23.0 115.06m (1.3)m

3 R imco Mauritius L td 31-Mar-20 10.1 50.59m (0.5)m

4 IV F Trus tee 17-F eb-18 9.3 46.54m 0.0m

5 HD F C Asset Management C o L td 31-May-20 3.6 18.13m 1.0m

6 R ashid As lam B in Mohideen 31-Mar-20 2.3 11.23m 0.0m

7 Indium Iv Holdings L td 31-Mar-20 2.2 10.75m (0.1)m

8 R imco India L td 31-Mar-20 2.0 9.91m (0.1)m

9 S park C apital Advisors 30-Jun-19 1.8 8.84m 8.8m

10 S teinberg India E m O p F und 31-Mar-20 1.3 6.27m 0.2m

(in %) Mar-19 Jun-19 S ep-19 Dec-19 Mar-20

P romoter 37.8 37.8 37.8 37.8 37.9

O thers 62.2 62.2 62.2 62.2 62.1




Financial Summary

Exhibit 13: Profit & Loss (| crore)

(Ye a r-e nd Ma rch ) F Y19 F Y20 F Y21E F Y22E

R e ve nue s 7,962.7 8,738.1 9,412.6 10,506.1

G rowth (% ) 18.5 9.7 7.7 11.6

R aw Materia l E xpenses 2,419.8 2,635.5 2,925.4 3,151.8

E mployee E xpenses 2,688.2 2,903.9 3,482.7 3,509.0

O ther E xpenditure 1,991.9 1,941.5 2,193.5 2,371.9

Total O perating E xpenditure 7,099.9 7,480.9 8,601.5 9,032.8

EBITDA 862.8 1,257.2 811.1 1,473.3

G rowth (% ) 45.7 -35.5 81.6

Interes t 179.2 359.7 325.4 287.8

D epreciation 306.5 585.9 593.1 612.7

O ther Income 34.6 37.9 14.1 21.0

P B T before E xceptional Items 411.8 349.5 -93.2 593.8

Less : F orex & E xceptional Items 1.5 19.6 0.0 0.0

P B T 410.3 329.8 -93.2 593.8

Total Tax 42.9 15.4 -11.2 71.3

P AT before MI 367.3 314.4 -82.0 522.5

Minority Interes t 34.2 38.1 -9.9 41.8

P AT 333.1 276.6 -71.9 480.9

Adjus ted P AT 333.1 276.6 -71.9 480.9

G rowth (% ) 26.0 -17.0 -126.0 -768.7

E P S 6.7 5.5 -1.4 9.6

EP S (Ad juste d ) 6.7 5.5 -1.4 9.6


Exhibit 14: Cash Flow Statement (| crore)


P rofit/(Loss ) after taxation 358.2 284.2 -71.9 480.9

Add: D epreciation & Amortiz ation 306.5 585.9 593.1 612.7

Net Increase in C urrent Assets -711.4 -555.5 8.8 -439.6

Net Increase in C urrent L iabilities 289.3 378.2 70.6 321.6

O thers 358.3 530.4 325.4 287.8

Ne t ca sh flow from op e ra ting a ctivitie s600.9 1,223.3 926.0 1,263.5

(Inc)/dec in F ixed Assets -700.0 -741.5 -100.0 -400.0

(Inc)/dec in Inves tments -22.5 -0.1 0.0 0.0

O thers 28.4 29.1 64.2 70.6

C F from inve sting a ctivitie s -694.0 -712.5 -35.8 -329.4

Inc / (D ec) in E quity C apita l 2.4 -120.5 0.0 0.0

P roceeds/(R epayment) Loan 292.9 -217.4 -463.2 -536.9

D ividend & D ividend Tax 0.0 -9.7 0.0 0.0

O thers -160.9 -327.2 -325.4 -287.8

C F from fina ncing a ctivitie s 134.4 -674.8 -788.6 -824.7

Net C ash flow 41.4 -164.0 101.6 109.4

O pening C ash 299.8 341.1 177.1 278.7

C losing C a sh 341.1 177.1 278.7 388.1

F C F -99.0 481.7 826.0 863.5


Exhibit 15: Balance Sheet (| crore)


E quity C apita l 505.2 499.5 499.5 499.5

R eserve and S urplus 2,708.5 2,772.6 2,700.7 3,181.6

Total S hareholders fund 3,213.8 3,272.1 3,200.2 3,681.1

Total D ebt 2,788.4 5,111.7 4,648.4 4,111.5

D eferred Tax L iability 149.1 155.2 170.7 187.8

Minority Interes t 466.1 446.4 491.0 540.1

Long term P rovis ions 266.7 327.3 360.0 396.0

O ther Non C urrent L iabilities 207.6 173.2 190.5 209.6

S ource o f F und s 7,091.5 9,485.8 9,060.9 9,126.1

G ross B lock - F ixed Assets 5,056.0 8,253.2 8,353.2 8,753.2

Accumulated D epreciation 1,612.4 2,198.4 2,791.4 3,404.2

Net B lock 3,443.6 6,054.9 5,561.8 5,349.0

C apita l WIP 550.0 736.0 736.0 736.0

Net F ixed Assets 3,993.6 6,790.8 6,297.7 6,085.0

G oodwill on C onsolidation 845.0 1,068.7 1,068.7 1,068.7

Inves tments 22.1 34.4 34.4 34.4

Inventory 732.2 961.0 865.5 966.0

C ash 341.1 177.1 278.7 388.1

D ebtors 2,028.7 2,366.4 2,398.1 2,676.7

Loans & Advances & O ther C A512.4 579.6 634.5 695.0

Total C urrent Assets 3,614.4 4,084.1 4,176.8 4,725.9

C reditors 1,014.1 1,293.9 1,198.7 1,338.0

P rovis ions & O ther C L 830.8 1,658.1 1,823.9 2,006.3

Total C urrent L iabilities 1,844.9 2,952.0 3,022.6 3,344.3

Net C urrent Assets 1,769.5 1,132.0 1,154.2 1,381.6

LT L& A, O ther Assets 453.1 427.3 470.1 517.1

D eferred Tax Assets 8.3 32.5 35.8 39.3

Ap p lica tion o f F und s 7,091.5 9,485.8 9,060.9 9,126.1


Exhibit 16: Key Ratios (| crore)


P e r sha re d a ta (|)

E P S 6.7 5.5 -1.4 9.6

C ash E P S 6.7 5.5 -1.4 9.6

B V 64.3 65.5 64.1 73.7

D P S 0.0 0.0 0.0 0.0

C ash P er S hare 32.3 44.0 55.9 68.1

O p e ra ting R a tios (%)

G ross P rofit 69.6 69.8 68.9 70.0

E B ITD A margins 10.8 14.4 8.6 14.0

Net P rofit margins 4.2 3.2 -0.8 4.6

Inventory days 33.6 40.1 33.6 33.6

D ebtor days 93.0 98.8 93.0 93.0

C reditor days 46.5 54.0 46.5 46.5

Assets Turnover 1.6 1.1 1.1 1.2

R e tu rn R a tios (%)

R oE 10.4 8.5 -2.2 13.1

R oC E 8.3 7.5 2.6 9.7

R oIC 9.0 7.8 2.7 10.8

V a lua tion R a tios (x )

P /E 18.6 22.4 -86.0 12.9

E V / E B ITD A 10.0 8.8 13.0 6.7

E V / R evenues 1.1 1.3 1.1 0.9

Market C ap / R evenues 0.8 0.7 0.7 0.6

P rice to B ook V alue 1.9 1.9 1.9 1.7

S o lve ncy R a tios

D ebt / E quity 0.9 1.6 1.5 1.1

D ebt/E B ITD A 3.2 4.1 5.7 2.8

C urrent R atio 1.8 1.3 1.3 1.3





Exhibit 17: ICICI Direct universal Coverage (Healthcare)

C om p a ny I-Dire ct C MP TPR a ting M C a p

C ode (|) (|) (| cr) F Y 19F Y 20EF Y 21EF Y 22E F Y 19F Y 20EF Y 21EF Y 22E F Y 19F Y 20EF Y 21EF Y 22E F Y 19F Y 20EF Y 21EF Y 22E

Ajanta P harma AJAP H A 1457 1,730 B uy 12717 43.5 53.4 56.0 72.0 33.5 27.3 26.0 20.2 21.8 24.7 22.3 24.2 17.1 18.1 16.7 18.5

Alembic P harmaALE MP H A 899 875 B uy 16949 31.4 46.3 41.4 39.8 28.6 19.4 21.7 22.6 19.6 20.6 17.7 16.0 21.8 26.3 19.5 16.2

Aurobindo P harmaAUR P H A 792 920 B uy 46403 41.9 48.8 55.0 61.4 18.9 16.2 14.4 12.9 15.9 17.2 18.2 18.7 17.7 17.0 16.3 15.6

B iocon B IO C O N 390 390 B uy 46788 6.2 5.8 9.8 18.2 62.8 67.0 39.6 21.4 10.9 10.9 15.1 22.1 12.2 10.4 15.2 22.4

C adila HealthcareC AD HE A 363 420 B uy 37141 18.1 14.0 16.9 20.9 20.1 26.0 21.4 17.4 13.0 11.0 12.2 13.8 17.8 13.8 14.8 16.0

C ipla C IP LA 631 670 B uy 50892 18.6 19.2 23.0 30.2 34.0 32.9 27.4 20.9 10.9 12.0 13.0 15.4 10.0 9.8 10.8 12.6

D ivi's Lab D IV LAB 2341 2,355 Hold 62155 51.0 51.9 58.2 73.6 45.9 45.2 40.2 31.8 25.5 23.9 23.0 24.1 19.4 18.8 18.1 19.2

D r R eddy's LabsD R R E D D 4043 4,615 B uy 67174 114.7 121.9 163.8 209.7 35.2 33.2 24.7 19.3 11.1 10.0 18.0 20.8 13.6 13.0 15.2 16.6

G lenmark P harmaG LE P HA 459 340 Hold 12957 26.9 26.8 34.6 43.2 17.1 17.1 13.3 10.6 15.3 12.8 14.5 16.1 13.5 12.0 13.5 14.5

H ikal H IK C H E 125 165 B uy 1540 8.4 8.1 10.8 13.8 14.9 15.4 11.6 9.1 14.3 13.0 14.2 15.7 13.6 12.2 14.2 15.6

Ipca Laboratories IP C LAB 1652 1,900 B uy 20868 35.1 47.8 63.3 79.2 47.1 34.5 26.1 20.9 15.0 17.4 19.7 20.7 14.2 16.6 18.1 18.6

Jubilant L ife JUB L IF 662 550 B uy 10546 54.9 59.9 69.8 89.8 12.1 11.1 9.5 7.4 14.3 14.6 17.2 19.7 17.8 16.6 16.4 17.5

Lupin LUP IN 921 930 Hold 41745 16.5 -12.7 25.6 38.7 55.7 -72.6 36.1 23.8 9.4 10.6 10.4 14.6 5.4 -4.6 8.5 11.6

Narayana H rudalayaNAR HR U 271 340 B uy 5536 2.9 6.4 -3.1 9.6 93.3 42.7 -88.2 28.2 7.7 11.0 0.0 14.2 5.5 11.4 -5.8 15.7

Natco P harma NATP HA 628 740 B uy 11440 35.4 25.3 23.9 22.4 17.8 24.8 26.2 28.1 21.3 14.0 12.9 11.3 18.5 12.2 10.7 9.3

S un P harma S UNP HA 484 540 B uy 116221 15.9 16.8 18.4 24.5 30.6 28.9 26.4 19.8 10.3 10.0 10.3 12.4 9.2 8.9 8.9 10.8

S yngene Int. S Y NINT 411 390 B uy 16446 8.3 10.3 8.6 12.2 49.7 39.9 38.6 27.3 14.8 15.0 12.9 16.4 16.8 15.7 13.7 16.3

Torrent P harma TO R P H A 2462 2,475 Hold 41663 48.9 60.6 67.0 88.3 50.3 40.7 36.7 27.9 14.2 15.7 17.7 21.2 17.5 21.2 20.0 22.0

S halby S H AL IM 71 70 Hold 766 2.9 2.6 0.7 4.0 24.2 27.8 96.6 17.6 6.8 7.2 1.8 7.0 4.1 3.5 1.0 5.2

Aster D M AS TD M 124 160 B uy 6184 6.7 5.5 -1.4 9.6 18.6 22.4 -86.0 12.9 8.3 7.5 2.6 9.7 10.4 8.5 -2.2 13.1

R oE (%)EP S (|) P E(x) R oC E (%)

Source: ICICI Direct Research, Bloomberg




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]




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