Aster DM Healthcare sets sights on smaller cities to expand play, grab top spot

Time of India

5 days ago

Mumbai:
Aster DM Healthcare
has set an ambitious goal of becoming the country's largest healthcare chain, surpassing
Apollo Hospitals
, through an over 30% increase in bed capacity and forays into new markets, said a senior executive at the Bengaluru-based company.
Aster emerged as the second-largest healthcare chain following a recent merger with US private equity giant Blackstone-backed Quality Care India. The combined entity reported more than ₹9,000 crore in revenue in FY25, trailing Apollo Hospitals' ₹22,027 crore, showed data from ET Intelligence Group.
Fortis Healthcare
ranked third with ₹7,861 crore revenue. It marked a sharp rise for Aster DM which ranked fifth in FY24 with ₹3,730 crore in revenue.
"When Stephen Schwarzman (global CEO of Blackstone) was here recently celebrating 20 years of Blackstone in India, the only thing he told us is we have to make this the number one healthcare organisation in India," Alisha Moopen, deputy managing director at Aster DM told ET.
She did not say when the company aims to attain the number one position. In terms of bed capacity, Aster may be leading by a whisker with a total of 10,300 beds after the merger, compared with Apollo Hospitals which has 10,187 beds. The combined entity Aster DM Quality Care India surpassed
Fortis Healthcare
which has a total capacity of about 4,750 beds.
In the next few years, Aster is looking to add 3,300 beds, taking the total to 13,600 beds.
Apollo Hospitals
, on the other hand, plans to invest ₹6,000 crore to add 4,300 beds.
Aster recorded adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) of ₹1,661 crore and 20.5%
Ebitda margin
in the last fiscal year. The multispecialty hospital chain is considering organic and inorganic routes for expansion in next 4-5 years, Moopen said. It operates 40 hospitals, employing 50,000 healthcare professionals, across 27 cities in India.
While Aster will continue to bolster its presence in strongholds in Kerala and Karnataka, the company aims to expand operations in central India with a focus on non-metros such as Indore, Raipur, Aurangabad, and Bhubaneshwar.
Aster specialises in areas like cardiology, oncology, transplant program, paediatrics, and neurosciences. Blackstone will be the largest shareholder in the new company with a 30.7% stake. Aster promoters will get about 24% while TPG-an early investor in Quality Care India-will hold 10.22%. The rest will be held by the public and other shareholders.
Explaining that the full benefits of the merger will be felt in 18-24 months, Moopen said one of the key areas of synergy will be procurement and supply chain optimisation. According to her, the purchasing power of the combined entity will enable better supply terms, cost efficiencies, and streamlined inventory management, helping reduce material costs and boosting margins.
"About 10-15% benefit on things like material cost should be applicable, thus enabling margin expansion...If we are operating at a 20.5% margin as a consolidated group entity, we should be moving to a 23-24%," said Moopen.
In terms of capacity utilisation, at a blended level, Aster DM's bed occupancy is at 58-60%. "There's room to improve occupancy in some of the assets and then there's a pipeline of beds that's coming," she said.