Aster DM Healthcare Ltd Management Discussions

Indian Economic Overview

Indias economy continued its strong growth momentum in FY24–25, registering a GDP growth rate of 6.5%,³ reaffirming its position as one of the fastest-growing major economies globally. This performance was driven by robust domestic demand, increased public investment and solid growth in the construction, services and trade sectors. Inflationary pressures eased notably, with consumer price inflation falling to a five-year low of 3.34% in March 2025. Government expenditure remained a vital force in driving economic activity, with the Union Budget allocating INR11.11 lakh Crore⁴ towards capital expenditure, underscoring a sustained focus on infrastructure-led growth. The healthcare sector also saw strong momentum, benefiting from increased public funding and private sector innovation. Looking ahead, Indias economic fundamentals remain solid, with GDP growth projected to stay steady at 6.5% in FY26.⁵ Inflation is expected to remain within a manageable range of 4.0% to 4.2%.

Despite external risks such as weak global trade and demand, India is well-positioned to maintain its growth trajectory, supported by strong domestic consumption, robust public policy measures and continued infrastructure investment.

Indian Healthcare Sector Overview

Indias healthcare sector sustained its growth and emerged as a vital pillar of the nations journey towards a healthier and more inclusive future. The sector encompasses key segments including healthcare delivery (hospitals and clinics), pharmaceuticals (considered at a retail level), medical devices, and diagnostic services. It has emerged as one of the countrys largest industries, contributing significantly to both revenue generation and employment. The industry was valued at INR 10.7 trillion in FY 2024 and is expected to grow at a CAGR of 10-12%⁷, reaching approximately INR 15.58–16.33 trillion by FY 2028 backed by the heightened inflow of private and public investments, growing health awareness, advancements in medical infrastructure and technology, government initiatives and improved access to medical services across rural and urban areas.

Government support continues to act as a strong catalyst for growth. The Government of India, through its National Health Policy and a wide range of central schemes and programs, has played a crucial role in achieving these healthcare goals. Ayushman Bharat – PMJAY, the worlds largest health assurance scheme, remains at the core of Indias public health initiatives. The schemes budget allocation witnessed a rise from INR 6,800 Crore in FY 2023-24 to INR 7,300 Crore in FY 24–25,⁹ with coverage being expanded to include Accredited Social Health Activist workers, Anganwadi workers and helpers. Further strengthening the tertiary healthcare capacity, five new All India Institutes of Medical Sciences (AIIMS) were inaugurated in February 2025.

Supporting this growth, the Digital India program has revolutionized the healthcare sector in India, bringing about remarkable changes. Initiatives like the Ayushman Bharat Digital Mission, CoWIN App, Aarogya Setu, e-Sanjeevani and e-Hospital have extended healthcare facilities to underserved areas. Through these endeavours using digital avenues, the existing gap among different stakeholders in the healthcare ecosystem has narrowed down¹⁰.

With sustained focus on infrastructure development, digital innovation and inclusive access, Indias healthcare sector is poised to play a crucial role in sustainable development and ensuring a healthier population in the years to come.

Healthcare Delivery¹¹

Indias healthcare delivery (hospitals and clinics) sector is witnessing strong growth and transformation post COVID-19 pandemic. With rising health awareness, increased insurance coverage and higher demand for treatments, hospitals have improved their profits, cash flows and return on capital. The healthcare delivery market which was valued at INR 6.3 trillion in FY 2024 is projected to grow at a CAGR of 10–12%, reaching INR 9.4–9.8 trillion by FY 2028.

Retail Pharmacy¹²

Indias retail pharmacy sector remains largely fragmented, with standalone pharmacies holding majority of the market. While organized chains and online pharmacies are growing, they still account for a relatively small portion of the overall market. The COVID-19 pandemic pushed retail pharmacies to adopt digital tools and expand their role beyond just dispensing medicines. The segment was valued at INR 2.6 trillion in FY 2024 and is expected to grow at a CAGR of 8–9%, reaching INR 3.5–3.7 trillion by FY 2028.

Diagnostic Services¹³

The diagnostic services market was valued at INR 0.9 trillion in FY 2024 and is expected to grow significantly to around INR 1.28-1.38 trillion by FY 2028 at a CAGR of 10-12%. This growth is driven by higher healthcare spending, an ageing population, rising incomes, increased awareness of preventive testing, better diagnostic technologies, expanding health insurance and government healthcare initiatives.

Medical Devices¹⁴

The medical devices market was valued at INR 0.9 trillion in FY 2024 and is expected to grow to INR 1.4-1.45 trillion by FY 2028 at a rate of 11-12% annually. India is the 4^th largest market in Asia and ranks among the top 20 globally. The key segments include consumables, diagnostic imaging, dental products and orthopedic implants.

Emerging Trends in the Healthcare Industry

Trend	Key Highlights
Telemedicine Adoption	Telemedicine is enabling remote consultations, online prescriptions and chronic disease management, offering patients cost-effective and convenient access to healthcare services.
AI & ML in Healthcare	Artificial Intelligence and Machine Learning are improving healthcare through accurate diagnosis, predictive analytics, robotic surgeries and administrative automation, leading to better treatment outcomes.
Wearable Devices	Wearables help track vitals in real-time, support early disease detection and boost patient engagement by keeping individuals more informed and connected to their health.
Digital Transformation	The use of electronic health records (EHRs), telehealth platforms, mobile apps and health data analytics is enhancing the efficiency and personalization of healthcare delivery.
Cybersecurity Focus	As digital health grows, protecting patient data through encryption, multi-factor authentication (MFA) and real-time monitoring is vital to maintain trust and regulatory compliance.
Robotics & Minimally Invasive Surgery	These technologies are allowing for more precise surgical procedures, smaller incisions, quicker recovery times and reduced pain and infection risks for patients.

Growth Drivers

Rising Population and an Ageing Demographic¹⁵

The demand for accessible and quality healthcare services is increasing as Indias population continues to grow. More significantly, the proportion of elderly individuals is rising steadily due to improvements in life expectancy. According to estimates, Indias population aged 60 and above is projected to grow from 153 million in 2023 to over 347 million by 2050, accounting for nearly 20% of the total population. This demographic shift highlights the urgent need for geriatric care, chronic disease management and senior-friendly infrastructure. In response, hospitals and healthcare providers are increasingly investing in specialised services and capacity expansion to cater to this segment, making it a key driver of long-term healthcare industry growth.

Expanding Health Insurance Coverage¹⁷

Health insurance penetration is emerging as a key growth driver for Indias healthcare industry. In FY 2023–24, Overall insurance penetration in India was 3.7%, slightly lower than 4.0% in the previous year and significantly below the global average of 7.0%, reflecting considerable scope for growth and deeper insurance adoption in the country. Indias non-life insurance penetration, which includes health insurance, stood at 1.0%, pointing to substantial untapped potential when compared to the global average of 4.2%. As government schemes like Ayushman Bharat and the increasing reach of private insurers bring more individuals under coverage, demand for healthcare services is expected to rise.

Technology and Digitization

Rapid advancements in technology are reshaping healthcare delivery by enabling faster, more accurate and cost-effective treatments, while also enhancing operational efficiency. A key outcome of this digital transformation is the growth of telemedicine, which is improving access to quality care in remote and underserved regions. Emerging technologies like Artificial Intelligence are further accelerating this shift by supporting innovation in diagnostics and improving patient care outcomes.

Rising Disposable Income and Health Awareness¹⁸

In FY 2023–24, the countrys total disposable income increased by 11.9%, reaching INR 305.94 lakh Crore. With greater financial capacity, households are allocating more resources towards healthcare services, including consultations, diagnostics, medicines and insurance. Simultaneously, heightened awareness around preventive care and well-being is fueling a shift towards more frequent and higher-quality healthcare consumption across the country.

Growing Medical Tourism

India is quickly becoming a leading destination for medical tourism, driven by the governments "Heal in India" initiative announced in the Union Budget 2025–26. With strong public-private collaboration, India is attracting international patients through its world-class healthcare, affordable treatment and traditional wellness systems like Ayurveda and Yoga. The Medical Value Travel (MVT) sector, valued at USD 2.89 billion in 2020, is expected to grow to USD 13.42 billion by 2026.²⁶

Opportunities

Rising Demand across Urban and Rural Areas

Factors such as population growth, elevated health consciousness and increased occurrence of chronic diseases are propelling the demand for high-quality healthcare services across urban, rural and semi-urban regions. Particularly in rural areas, the unmet need for primary and secondary healthcare services presents a major expansion opportunity for healthcare providers and innovators.

Low Hospital Bed Density²⁸

Indias healthcare sector presents a major growth opportunity due to the significant gap in infrastructure, with only 16 hospital beds per 10,000 people compared to the global average of 33. To meet future needs and global standards, the country must greatly expand its hospital capacity and medical workforce.

Prevalence of Non-Communicable Diseases (NCDs)³⁰

Non-communicable diseases (NCDs) such as heart disease, cancer, diabetes and other chronic conditions are becoming the leading cause of death in India. Their share has increased from 68% in 2008 to 76% in 2019 and is projected to reach 84% by 2030. This rise is driven by lifestyle changes, aging population and growing urbanization. As a result, there is increasing demand for long-term care, diagnostics, specialty treatments and health-tech solutions. This shift presents a major growth opportunity for the Indian healthcare sector, especially in areas like cardiology, oncology, orthopaedics and chronic disease management.

Growth of HealthTech and AI Startups

Indias startup ecosystem is augmenting innovation in health technology, offering scalable and efficient solutions across the healthcare industry. These startups are improving patient outcomes and attracting substantial investments from domestic and global venture capital firms. With rising internet penetration and smartphone use, digital health startups are well positioned to widen the access of specialised care.

Investment in Health Infrastructure

The governments focus on strengthening the healthcare ecosystem through initiatives like Ayushman Bharat Health Infrastructure Mission is laying a strong foundation for future growth. Meanwhile, private players are expanding their network in tier II and tier III cities to capitalise on the emerging demand. Investments in technology infrastructure, such as, cloud-based systems, maintenance of digital records and health data networks are also enabling faster and integrated healthcare delivery.

Private Equity Investment³²

Private equity and venture capital (PE/VC) investments in Indias healthcare sector have evolved significantly between 2019 and 2024, reflecting both growth and market adjustments. In 2019, the Indian healthcare sector witnessed 52 investment deals amounting to USD 0.81 billion. By 2024, the number of deals grew to 94 and the total investment value increased to USD 1.55 billion. This trend reflects a maturing investment landscape, with increasing emphasis on strategic, high-impact opportunities over sheer deal volume.

Challenges

Workforce Shortages³³

India remains among the 57 nations facing a significant shortage of human resources for health (HRH), with a national density of only 20.6 doctors, nurses and midwives per 10,000 people, although marks a notable improvement from 13.6 in 2005 is still less than half of the WHO-recommended 44.5.

Regional Disparities

There is a notable imbalance in healthcare infrastructure between urban and rural India. While metropolitan areas have access to multi-specialty hospitals and advanced technology, many rural and tribal areas still lack basic facilities. This disparity affects health outcomes and increases the burden on urban healthcare systems.

Regulatory and Compliance hurdles

The healthcare sector is subject to frequent policy shifts and complex regulatory frameworks, which vary between states.

Navigating these regulations can slow innovation and deter investment. Additionally, the lack of uniform compliance mechanisms often leads to delays in product roll outs and service expansion.

Company Overview

Aster DM Healthcare Limited is one of the largest healthcare service providers operating in India with a strong presence across primary, secondary, tertiary, and quaternary healthcare through 19 hospitals with 5,159 beds, 262 labs and patient experience centers, 203 pharmacies (Operated by Alfaone Retail Pharmacies Private Limited under brand license from Aster) and 10 clinics across 5 states in India, delivering a simple yet strong promise of "Well Treat You Well." Recognised for its consistent performance, Aster was awarded the ‘Best Multispecialty Hospital – Group by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) in FY25. It was also awarded the Best Hospital Chain by Financial Express and Best Healthcare Brand by Economic Times in the same period.

Merger of Blackstone-backed Quality Care India Limited with Aster

In a strategic move to further accelerate growth and strengthen our position in the Indian healthcare landscape, Aster DM Healthcare has announced a merger with Blackstone backed Quality Care India Ltd to form one of the top three hospital chains in India with a bed capacity of 10,301 beds across 38 hospitals. This merger brings together Asters robust network with Quality Cares strong footprints in central and south India markets, creating a well-diversified healthcare entity operating across 9 states and 27 cities. The combined entity, ‘Aster DM Quality Care Limited, is expected to unlock significant synergies and also offer strong potential for brownfield and greenfield expansion. Together, Aster DM and Quality Care plan to add 3,300+ beds, taking the total capacity to over 13,600 beds in the coming years.

Valuation and Shareholding

Based on FY24 adjusted post-Ind AS figures, the transaction values Aster at 36.6x EV/EBITDA and QCIL at 25.2x EV/EBITDA implying a 45% valuation premium for Aster. As per the agreed swap ratio, Aster shareholders will hold 57.3% and QCIL shareholders will hold 42.7% in the merged entity. The merger is cash neutral and is expected to be EPS accretive from the first full year of operations.

Transaction Mechanism and Timelines

Post receipt of the shareholders, CCI and stock exchange approval, the Company completed the Preferential allotment of ~3.6% stake to Blackstone and TPG in the Company in lieu of initial acquisition of 5.0% stake in Quality Care by the Company. The shares issued under the preferential allotment are now listed on the stock exchanges (BSE and NSE).

The closing of the transaction is pending the fulfilment of regulatory and compliance requirements, including the receipt of no-objection letters from the stock exchanges, shareholders and approval from the National Company Law Tribunal (NCLT). The transaction is expected to be completed by the fourth quarter of FY26.

Strategic Rationale

The merger is expected to result in significant strengths including scale, diversification, enhanced financial metrics, synergies, increased growth potential, and backing of marquee PE investors.

Synergies

The combined entity is strategically positioned to realize significant synergies across revenue enhancement, procurement and supply chain optimization, capital expenditure efficiencies, and the integration of corporate functions. These synergies are expected to unlock substantial revenue growth by leveraging the platforms clinical depth and operational scale. The merged operations are projected to deliver an EBITDA upside potential of 10–15% over the years, supported by streamlined processes and enhanced cost efficiencies.

Business Overview

Core Business

Hospitals and Clinics

As of FY25, the Company operated a total of 5,159 beds across 19 hospitals, strategically distributed across three geographic clusters—2,633 beds in Kerala, 1,479 beds in the Karnataka & Maharashtra cluster, and 1,047 beds in the Andhra & Telangana cluster. Aster continues to strengthen its position in the Indian healthcare and hospital sector, with hospitals and clinics contributing close to 94% of total revenue in FY25.

Cluster wise hospitals

Hospitals	Location	Commencement/ Acquisition year	Bed Capacity	Operational Beds (Census)
Aster Medcity	Kochi, Kerala	2014	862	662
Aster MIMS Calicut	Kozhikode, Kerala	2013	698	465
Aster MIMS Kottakal	Kottakal, Kerala	2013	359	282
Aster MIMS Kannur	Kannur, Kerala	2019	410	347
Aster Mother Hospital	Areekode, Kerala	2022	140	101
Aster PMF Hospital	Kollam, Kerala	2023	164	117
Aster CMI	Bengaluru, Karnataka	2014	509	366
Aster Whitefield	Bengaluru, Karnataka	2021	380	234
Aster RV	Bengaluru, Karnataka	2019	236	168
Aster G Madegowda	Mandya, Karnataka	2023	100	35
Aster Aadhar Hospital	Kolhapur, Maharashtra	2008	254	211
Aster Prime Hospital	Hyderabad, Telangana	2014	158	98
Aster Narayanadri	Tirupati, Andhra Pradesh	2023	150	114
Aster Ramesh Guntur	Guntur, Andhra Pradesh	2016	350	225
Aster Ramesh - Main Centre	Vijayawada, Andhra Pradesh	2016	135	125
Aster Ramesh - Labbipet	Vijayawada, Andhra Pradesh	2016	54	47
Aster Ramesh Adiran IB	Vijayawada, Andhra Pradesh	2023	50	42
Aster Ramesh Sanghmitra	Ongole, Andhra Pradesh	2018	150	130

Other Business

Aster Labs

Aster Labs, the diagnostic and pathology wing of Aster DM Healthcare, offers over 2500 diagnostic tests within South India through its network of 1 Reference Lab, 13 Satellite Labs, 9 Hospital Lab Managements (HLMs) and 248 Patient Experience Centres (PECs) including 52 in Karnataka and 196 in Kerala. Aster Labs continues to strengthen its footprint through state-of-the-art technology, expert pathologists and technicians and world class infrastructure, ensuring reliable, accessible and efficient diagnostics for every patient.

Aster Pharmacy*

Aster Pharmacy represents Aster DM Healthcares dedicated retail pharmacy business, aimed at delivering high-quality pharmaceutical and wellness products to communities across southern India. With a network of 203 pharmacies, the Company continues to expand access to healthcare products and services by offering a comprehensive range of therapeutic, nutritional, infant care, lifestyle, and wellness products.

*Pharmacies in India operated by ARPPL under brand license from Aster

Aster Digital

FY 2025 marked a pivotal year in our digital transformation journey with the launch of the Aster Health App, aimed at enhancing patient convenience and streamlining the healthcare experience. In the first phase, the app was rolled out across 10 hospitals in Kerala, Karnataka, Telangana, and Maharashtra. It offers a seamless interface for digital registration, appointment booking, virtual consultations, in-hospital check-ins, payments, family onboarding, reminders, and access to medical records.

Financial Performance

Aster India Financial Performance

Over the past five years, India operations have experienced significant growth, with a CAGR of 20% in revenue and 38% in EBITDA up to FY25. This has been driven by the capacity expansion, in-patient volume growth, average revenue per occupied bed (ARPOB) growth, offering advanced quaternary and tertiary healthcare services.

Profit and Loss Statement

(INR in Crore)

Particulars	FY 2025	FY 2024	YoY%
Revenue From Operations	4,138	3,699	12%
Material Costs1	938	916
Doctor Cost	921	816
Employee Cost	760	676
Other Cost	713	672
Operating EBITDA2	806	620	30%
Employee Stock Option Expenses	8	5
Movement in FV of contingent Consideration Payable	1	(4)
Variable Operation and Management Fees	32	31
EBITDA Post Ind AS	765	588	30%
Depreciation	249	222
Finance Cost	124	111
Other Income	148	25
Profit Before Tax	540	281	92%
Tax	134	57
Profit After Tax (Before exceptional item)	406	224	81%
Exceptional Item	(50)	0
Profit After Tax	356	224	59%
Share of Profit/(Loss) of Associates	(19)	(11)
NCI (Non-Controlling Interest)	30	25
Profit After Tax (Post Non-Controlling Interest)	307	188	64%
Normalised PAT3	357	240	49%

1. Material Cost % (Ex.Wholesale pharmacy) for FY25 is 20.9% and FY24 is 22.0%.

2. Operating EBITDA for the period FY25 excludes the ESOP Cost of INR 8.4 Crore [FY24: 5.3 Crore], Movement in fair value of contingent consideration payable of INR 0.8 Crore [FY24: -4.4 Crore], Variable O&M fee amounting to INR 31.8 Crore [FY24: 31.0 Crore]. Our Operating & Management (O&M) agreements, encompasses both fixed and variable component. While the fixed component of the O&M fee is delineated into depreciation and finance costs as per Ind AS 116, whereas the variable component falls outside the scope of IndAS 116, leading to an incomplete reflection of the standards impact in EBITDA

3. Normalised PAT for FY25 includes an amount of INR 108.3 Crore from the interest/gain earned on the investment of sale proceeds from the segregation of GCC vertical and excludes project unity transaction cost of INR 50.1 Crore. and FY24 excludes a one-time impact due to recognition of Net Deferred Tax Liability to the tune of INR 52.4 Crore.

Revenue

The consolidated revenue grew by 12% to INR 4,138 Crore in FY25 as compared to INR 3,699 Crore in FY24. The growth in revenue is driven by YoY growth of 7% in In-patient volume and YoY growth of 12% in ARPOB reaching to INR 45,000 in FY25, with an improvement of 6% YoY in ALOS.

EBITDA

Consolidated Operating EBITDA exhibited strong growth, increased by 30% to INR 806 Crore in FY25 from INR 620 Crore in FY24. Operating EBITDA Margin has improved to 19.5% in FY25 as compared to 16.8% in FY24. This improvement was driven by ongoing cost discipline, operational efficiencies, and enhanced EBITDA performance from our lab business.

Costs

Material cost as a percentage of revenue (excl. wholesale Pharmacy) has seen a steady decline over a period, from 23.5% in FY23 to 22.0% in FY24 and further declining to 20.9% in FY25. This has been the result of the Companys operational efficiencies, effective cost management and strategic sourcing, implemented across its business units.

Employee cost remained stable at around 18.0% in FY25. Other costs as a percentage of revenue have reduced to 17.2% in FY25 from 18.2% in FY24, mainly due to rent reversals from lease changes, a one-time higher CSR spend in the previous year, and lower ECL provisions following recovery of long-pending receivables from government schemes and international business.

Finance Costs

Finance cost for FY25 was INR 124 Crore as compared to INR 110 Crore in FY24. The increase was primarily due to higher lease liabilities for the new projects announced in the hospital business.

Depreciation

Depreciation for FY25 was INR 249 Crore as compared to INR 220 Crore in FY24. The increase was primarily due to capacity addition of ~300 beds.

Taxation

Current Tax and deferred tax expenses were at INR 134 Crore in FY25 as compared to INR 57 Crore in FY24, on account of an increase in profits from the hospital business.

Other income

Other income grew significantly to INR 148 Crore in FY25 from INR 25 Crore in FY24 primarily from the interest/gain earned on the investment of sale proceeds from the segregation of GCC business.

Net Profit after Tax

The Companys PAT (post non-controlling interest) increased from INR 188 Crore in FY24 to INR 307 Crore in FY25, representing a growth of 64%, aided by improved operational leverage and higher other income related to the GCC business restructuring. The Normalised PAT (Post NCI) excluding the one-time tax impact, increased from INR 240 Crore in FY24 to INR 357 Crore (Excluding transaction cost) in FY25, reflecting a growth of 49%.

Dividend

For FY25, the Board declared an interim dividend of INR 4.0 per equity share (face value of INR 10 each) and has recommended a final dividend of INR 1.0 per equity share (subject to the approval of shareholders in the Annual General Meeting of the company).

Aster India Balance Sheet

Particulars	As at March 31, 2025	As at March 31, 2024
LIABILITIES
Shareholders Equity	500	500
Minority Interest	224	158
Other Reserves	2,469	897
Land Revaluation Reserve	460	460
Gross Debt	642	669
Lease Liabilities	1,376	714
Other Current Liabilities	690	581
Other non-current Liabilities	246	429
Total Liabilities	6,606	4,409
ASSETS
Property, Plant and Equipment (including CWIP)	2,694	2,474
Investments (including Goodwill)	508	278
Right to Use Assets	1,255	608
Inventories	93	111
Cash, Bank Balance and Current Investments	1,381	114
Other non-current assets	247	285
Other current assets	429	541
Total Assets	6,606	4,409

Fixed Assets

Fixed assets as on March 31, 2025, is INR 2,694 Crore as compared to INR 2,474 Crore as on March 31, 2024. This growth is primarily attributable to capacity expansion across key facilities (including Aster Medcity, Aster MIMS Kottakkal, Aster MIMS Kannur, Aster Whitefield, and Aster Aadhar) along with investments in medical equipment.

Gross Debt

The companys Balance sheet remained strong with a net cash position of INR 739 Crore as on March 31, 2025.

Total Borrowings marginally reduced to INR 642 Crore as on March 31, 2025 from INR 669 Crore as on March 31, 2024.

Total Cash and Cash Equivalents has substantially increased to INR 1,381 Crore as on March 31, 2025 from INR 114 Crore as on March 31, 2024 on account of sale proceeds from the segregation of GCC business

Net Debt/(cash) to EBITDA (Pre IND-AS) reduced to -1.1 times as on 31^st March 2025 v/s 1.1 times as on 31 March 2024.

Lease Liabilities

Overall Lease Liabilities as on March 31, 2025, were INR 1,376 Crore as compared to INR 714 Crore on March 31, 2024, due to planned capacity addition at Aster CMI and greenfield project at Hyderabad (Women & Child).

Change in financial ratios (standalone)

Ratio	FY 25	FY 24	Change
Debtor Turnover Ratio (times)	17.47	17.05	0.42
Inventory Turnover Ratio (times)	10.72	10.51	0.21
Interest Coverage Ratio (times)	3.83	4.52	-0.69
Current Ratio	3.83	3.82	0.01
Net Debt Equity Ratio	-0.03	0.24	-0.27
EBITDA Margin (%)	19.67%	17.68%	2.0%
PAT (Post-NCI) Margin (%)*	268%	8%	259.6%
Return on Net Worth (%)*	189%	5%	184.0%

*Considered a one-time dividend income of INR 5,569.96 Crore and exceptional income of INR 323.15 Crore while calculating this ratio.

Aster India Operating Performance

Bed Capacity

The total bed capacity increased to 5,159 as of March 31, 2025, from 4,867 beds as of March 31, 2024. The Company added ~300 beds last year including 100 beds at MIMS Kannur, 100 beds at Aster Medcity and the balance 100 beds at other locations in Kerala and Karnataka. Aster aims to increase its standalone bed capacity to ~7,300 beds in coming years, aligning with its priority to accelerate its leadership journey in the Indian healthcare landscape.

ARPOB

The Company has witnessed a strong growth in ARPOB, growing at 5-year CAGR of 10% till FY25. ARPOB grew by 12% to INR 45,000 in FY25 from INR 40,100 in FY24. The overall growth in ARPOB is due to price hike, change in specialty mix and payor mix over the last one year.

Payor Profile

The overall payor revenue mix witnessed a change with TPA/ Insurance patient contribution increased by 300 bps year on year to 30% in FY25 from 27% in FY24. International patient contribution decreased by 100 bps year on year to 4% in FY25 from 5% in FY24 in the Overall hospital revenue, due to dip in international patient volumes primarily from Oman and Maldives. The Company is actively re-engaging with partners in key geographies and expanding the outreach into newer markets such as Africa and Southeast Asia by a more structured digital engagement strategy and an enhanced referral partner network.

ALOS

The average length of stay (ALOS) improved by 6% YoY, to 3.2 days in FY25 as compared to 3.4 days in FY24, reflecting enhanced clinical protocols. The Company has taken several initiatives including faster discharges for insurance (TPA) patients, improved management of elective admissions, increased use of minimally invasive and robotic surgeries enabling quicker recoveries and reduction in scheme-based patient admissions. Collectively these efforts have led to shorter hospital stays and improved operational efficiency.

Specialty Mix

The Company continued to maintain a well-diversified specialty revenue mix, reinforcing its focus on building a sustainable and resilient business model. In FY25, the top six specialties—Cardiac Sciences, Neurology, Oncology, Liver Care, Nephrology, and Orthopaedics—contributed 57% of total hospital revenue, with no single specialty accounting for more than 15%.

The Company remains committed to expanding access to advanced care in high-demand areas such as Oncology, which saw its contribution rise to 10% in FY25, up from 7% in FY22.

High end Medical Treatment

The Company has significantly advanced its medical treatment capabilities. In FY 2025, the Company performed over 575 transplants, up from 510+ in FY 2024 and conducted more than 1865 robotic surgeries, compared to 1140+ in FY 2024.

Core Business Performance – Hospitals & Clinics

Revenue

The Companys core business, hospital and clinics, has achieved a CAGR of 20% in revenue over the last five years till FY25. The core business that includes hospitals and clinics, contributed to 94% of the total revenue and grew by 13% to reach INR 3,990 Crore in FY25 from INR 3,519 Crore FY24.

Operating EBITDA and Margin

The Operating EBITDA for hospital and clinics has achieved a CAGR of 33% over the last five years till FY25. The Operating EBITDA grew to INR 875 Crore in FY25 from INR 688 Crore in FY24, witnessing a growth rate of 27% YoY aided by various cost discipline and operational leverage. The operating EBITDA margin from core hospital business was 21.9% in FY25 compared to 19.5% in FY24.

Return Ratio

The Return on capital Employed (ROCE*) from the Companys core hospital business stood 25% in FY25 from 23% in FY24 showcasing consistent year-on-year improvements in operating performance.

Financial Performance

Kerala cluster, contributing 53% in the overall hospital business revenue, witnessed revenue growth of 5% YoY to INR 2,108 core in FY25. The growth was partially impacted by the month-long Ramadan festival, a shorter February month and a decline in international patient flow particularly from Oman and Maldives. Meanwhile, the cluster also witnessed some changes in its management team during the year. Despite these factors, the Operating EBITDA grew by 15% YoY with improvement in operating EBITDA margin at 23.4% in FY25 from 21.4% in FY24 driven by effective cost management and enhanced operational efficiency.

Operational Performance

The Company has increased its capacity by adding ~240 beds in the Kerala Cluster in FY25. APROB of Kerala cluster witnessed a growth of 11% YoY at INR 42,300 in FY25 from INR 38,100 in FY24.

Operational Metrics	FY 25	FY 24
ARPOB (INR)	42,300	38,100
Occupancy	71%	79%
In-Patient Visits	1,59,300+	1,54,200+
Out-Patient Visits (Mn)	2.15	2.05
ALOS (Days)	3.1	3.4

Karnataka & Maharashtra

Financial Performance

The Karnataka and Maharashtra cluster performed strongly, contributing 35% to hospitals and clinics revenue. The clusters revenue grew by 28% year-over-year to INR 1,408 crore in FY25. The Operating EBITDA increased by 48% to INR 321 crore with an operating EBITDA margin of 22.8% in FY25 vs 19.7% in FY24, driven by strong performance following the successful ramp up of the Whitefield hospital in Bengaluru. Excluding the Whitefield hospital, the cluster achieved operating EBITDA margin of 25.1% in FY25 as compared to 23.4% in FY24.

Financial Performance

Andhra & Telangana cluster performed well with a revenue increasing by 15% YOY to INR 473 crore while operating EBITDA grew by 45% YoY with operating EBITDA margin at 12.7% in FY25 from 10% in FY24 driven by efficiency improvements.

Operational Performance

The clusters APROB increased by 14% YoY to INR 61,300 from INR 53,600 in FY24 while occupancy rates also increased to 62% in FY25 from 61% in FY24. The Company has increased its capacity by adding ~60 beds in the Karnataka and Maharashtra Cluster in FY25.

Operational Metrics	FY 25	FY 24
ARPOB (INR)	61,300	53,600
Occupancy	62%	61%
In-Patient Visits	73,910+	63,500+
Out-patient Visits (Mn)	0.78	0.67
ALOS (Days)	3.1	3.2

Operational Performance

The clusters APROB increased by 6% YoY to INR 29,900+, while occupancy rates also increased to 54% in FY25 from 50% in FY24.

Operational Metrics	FY 25	FY 24
ARPOB (INR)	29,900+	28,100
Occupancy	54%	50%
In-Patient Visits	39,700	36500+
Out-patient Visits (Mn)	0.37	0.33
ALOS (Days)	3.9	3.9

Aster Labs Performance

Overall, the Lab business demonstrated strong performance over the last year. The overall revenue increased by 12% YoY to INR 132 Crore in FY25 from INR 118 Crore in FY24. While the business achieved positive Operating EBITDA in the fourth quarter of the previous financial year, it increased to INR 10 crore in FY25, with an operating EBITDA margin of 7.6%.

Aster Pharmacy Performance

The revenue from the wholesale Pharmacy business decreased to INR 134 Crore in FY25 from INR 168 Crore in FY24. The dip in revenue is primarily due to exit from one of the loss making business unit of the wholesale pharmacy business. This strategic decision is taken with a view to achieving the profitability of pharmacy business in the coming year.

Digital Transformation

Aster Digital

The Aster Health app has clocked over 100,000 downloads since its launch in November 2024, marking a milestone in digital convenience. In Kerala, a key market for Aster, we launched the Malayalam version, becoming the states first regional language healthcare super app. In parallel at four of our flagship hospitals, we introduced Aster Care - a platform to guide patients through their personalised clinical journeys achieving 79% engagement.

Key Technology upgradation

During FY25, we further strengthened our cancer care and neurosciences divisions by introducing cutting-edge technologies, including Indias first Intraoperative Electron Radiation Therapy (IOeRT) and South Asias first Mixed Reality Technology, reinforcing our commitment to clinical excellence and innovation.

Investment Plan

In FY25, the company has added around 292 beds, including 100 beds at MIMS Kannur, 100 beds at Aster Medcity and the balance 92 beds at other locations in Kerala and Karanataka, reaching total bed capacity to 5,159 beds as of March 31, 2025.

The Company is making substantial capital investments and planning to add 2,100+ beds in the coming years through a mix of brownfield and greenfield projects. Out of the total 2100+ beds, 490+ beds will be added in FY26, 1050+ beds will be in FY27 and 580+ beds beyond FY27. With this, the Company is aiming to increase its total bed capacity to ~7,300 beds. As per the strategy, out of total bed additions 68% will be the part of greenfield and 32% beds will be the part brownfield expansion.

Kerala Cluster

In Kerala, the Company plans to add 818 beds over the next three years through two major greenfield expansions 264 beds in Kasaragod and 454 beds in Trivandrum, further strengthening its regional presence and capacity. Additionally, the Company will add further 100 beds at Aster Medcity, increasing its total bed capacity to over 950 beds.

Karnataka & Maharashtra Cluster

In Bengaluru, Aster plans to add 939 beds, including 350 beds at Aster CMI, 159 beds at Aster Whitefield, and 430 beds at a new hospital on Sarjapur Road—of which 300 beds will become operational in FY27 and the remaining 130 beds in FY29. Strategically located in the fast-growing Sarjapur corridor, the new hospital strengthens our presence within Bengalurus expanding IT hub and enhances our city-wide coverage across key zones. With this addition, Asters total capacity in Bengaluru exceeds 2,000 beds, reinforcing our position among the top three healthcare providers in the city.

Andhra & Telangana Cluster

The Company plans to add 75 beds at Aster Ramesh Ongole in FY26 and open a 300-bed single-speciality Women & Children Hospital in Hyderabad, scheduled for commissioning in FY27. With this the total bed capacity for Andhra & Telangana cluster to reach 1,422 beds.

Human Resources

Aster DM Healthcare Limited continues to believe that its people are the foundation of its success. The Company is focused on creating a purposeful and inclusive work environment where individuals are empowered to grow and thrive. The organisation remains committed to developing a passionate, future ready workforce aligned with its mission of delivering high quality healthcare. Through structured leadership development, upskilling initiatives and the Aster Advantage Programme, team members gain access to world class training, digital learning and career pathways with global exposure.

Aster values diversity across nationality, culture, generation and perspective, creating a collaborative space where every voice is respected and every individual has the opportunity to contribute meaningfully. Employee engagement, wellbeing and talent retention continue to be central to HR practices, supported by progressive policies and a culture of support. As part of its broader commitment to society, Aster encourages employees to take part in community service, offering platforms to engage in healthcare outreach and disaster relief. Guided by its core values of passion, respect, integrity, compassion, excellence and unity, the Company strives to deliver on its brand promise of ‘Well Treat You Well in every interaction, both within and beyond the workplace. As of March 31, 2025, the Company has a workforce of 20,458 professionals including 3,302 doctors, 6,304 nurses, 7,889 other healthcare workers and 2,963 outsourced staff. Aster India has been officially certified as a Great Place To Work?, a globally recognized benchmark for workplace culture. 90% of employees expressed pride in working at Aster, and 89% believe their work holds special meaning, reinforcing the companys deep sense of purpose.

Internal Control System and their Adequacy

Aster DM Limited prioritises strong financial controls to safeguard the Companys assets and ensure accurate financial reporting establishing internal policies and procedures that govern the orderly and efficient conduct of business. The internal control framework (not regulatory) is specifically designed to cater to the Companys diverse operations across various locations, ensuring consistency and efficiency across its operations. The internal control system is designed to be proportionate to the size and complexity of Asters operations. Asters internal controls are designed to maintain adherence to all applicable laws and regulations, safeguarding the Company from legal repercussions and reputational damage. The controls in place help the Company achieve its strategic objectives by streamlining operations and mitigating risks. They promote operational efficiency by optimising business processes and minimising waste and ensures accuracy and reliability of financial reporting, fostering trust and transparency with investors and other stakeholders.

The Chief Financial Officer (CFO) at Aster annually certifies the existence of effective internal controls within the Companys Corporate Governance report, adding another layer of accountability and transparency. Aster also has a comprehensive internal audit and internal financial control audit programme in place. This programme is managed by a dedicated internal audit team, supplemented by the expertise of an external risk management firm. The Audit Committee of the Board oversees the internal audit function, ensuring its independence and effectiveness. Internal auditors regularly update the Audit Committee through reports and presentations, keeping them informed about the state of the Companys internal controls. The Audit Committee approves an audit charter that defines the scope and authority of the internal audit function. Based on a thorough risk assessment, the internal audit team develops a plan to evaluate the design and effectiveness of internal controls across the organisation. This approach ensures that Asters internal controls are focused on mitigating the most significant risks facing the Company, providing the Board with greater assurance about the Companys overall financial health and risk management posture.

Cautionary Statement

Certain statements in the Management Discussion and Analysis section pertaining to the Companys objectives, outlook, estimates and expectations may be considered forward looking statements, as defined under applicable laws and regulations. These are based on current assumptions, forecasts and internal and external information available at the time of reporting. However, actual results may differ materially due to various known and unknown risks, uncertainties and other factors beyond the Companys control, including but not limited to changes in the macroeconomic environment, industry dynamics, regulatory developments, legal proceedings and shifts in political or market conditions. These statements are based on current assumptions and available information. Since the factors underlying these assumptions are subject to change over time, the estimates on which they are based are also subject to change accordingly. These statements do not constitute guarantees of future performance and should not be relied upon excessively. The Company assumes no obligation to revise or update any forward-looking statements, whether because of new information, future events, or otherwise.

Risk Management

Navigating challenges with perseverance and performance

Risk is the possibility of an event or condition occurring that may have a negative impact on objectives, outcomes, or assets. It involves uncertainty and the potential for loss or harm, often measured in terms of likelihood and impact.

Business risk is an inherent part of growth and transformation. It arises from uncertainties in markets, operations, regulations, and the broader economic environment, any of which can disrupt performance, affect stakeholder confidence, and challenge long-term goals. At Aster DM Healthcare Limited, we view risk not just as a threat but as a catalyst for resilience, innovation, and strategic agility.

"Risk can neither be avoided nor eliminated completely. Indeed, without taking risk, no business can grow"

- Peter Drucker

Navigating challenges with perseverance and performance

Our Enterprise Risk Management (ERM) function supports strategic goals by identifying, assessing, and mitigating potential threats in a timely manner. By proactively recognising risks and defining de-risking strategies, we enable informed decision-making and improved performance.

Operating in a dynamic environment, our integrated risk management framework is embedded across functions and aligned with our governance and business objectives thereby ensuring agility, resilience and consistent value delivery to stakeholders.

Comprehensive Enterprise Wide Risk Management Framework

We follow an integrated approach to identifying, assessing and monitoring risks across all categories. The company adopts a dual approach of combining top-down strategic reviews along with bottom-up tools, through which we ensure a thorough understanding of risks at every level. These insights guide our risk appetite, align with Board expectations as well as support regulatory compliance and reputation management.

Our framework is regularly updated to incorporate best practices, cover emerging risks, external or regulatory changes. We use a ‘three lines of defence (3LOD) model to manage risk exposure, uphold solvency, meet compliance needs, protect our reputation and drive sustainable business growth.

Risk Management Structure

Having an appropriate Risk Management Structure is one of the key essentials of Risk Governance. This refers to the organizational structures, reporting relationships, delegation of authority, and roles and responsibilities that the company establishes to make decisions and control activities relating to risk management. The Companys ability to conduct effective risk management is dependent upon having an appropriate risk governance structure and well-defined roles and responsibilities. Appropriate Committees (e.g. Technology Steering Committee, Medical Advisory Board are formed to assess and evaluate specific risks which the company faces or might face.

Risk Management Process

Risk Identification and Analysis

We proactively identify, evaluate and classify risks that could affect our operational continuity, strategic ambitions, regulatory compliance, or stakeholder trust, ensuring we stay ahead of potential disruptions. We draw on both internal performance insights and external intelligence including defined key risk indicators, market dynamics, competitor benchmarking and regulatory shifts to assess risks holistically and make informed decisions.

We conduct thorough analyses across all critical business dimensions, via brainstorming sessions, workshops with subject matter experts etc, which covers financial performance, operational processes, workforce trends, regulatory frameworks, and economic indicators, to detect early warning signals.

We continuously track emerging risks by monitoring geopolitical developments, environmental challenges and macroeconomic movements, enabling us to stay agile in a volatile global environment.

We group interconnected risks into thematic categories, allowing us to implement targeted mitigation strategies, optimise resource allocation and strengthen our response planning. We align each risk theme with relevant strategic pillars of the company and governance bodies to ensure clear accountability, faster escalation and more effective resolution.

Risk Assessment

We evaluate and rank risks based on both the likelihood of their occurrence and the potential impact, ensuring we focus our attention and resources on the most material threats.

We assess each risk across three critical dimensions

• Significance of impact – how deeply the risk could affect our operations, reputation, finances, or strategic objectives.

• Probability of occurrence – the likelihood of the risk materialising based on historical trends and emerging signals.

• Strength of existing de-risking strategies or actions – how effective our current controls and safeguards are in reducing risk exposure.

We use a structured and dynamic risk rating system that blends qualitative insights with quantitative models, allowing us to assign objective scores and prioritise mitigation efforts accordingly.

We treat risk assessment and prioritisation as an ongoing, enterprise-wide exercise, led by cross-functional governance teams from our Board of Directors to individual business unit heads to ensure alignment, vigilance and timely action.

Some of the risks which we assess, and monitor includes Strategic risks, Statutory compliance risks, financial risks, Health and Safety Risks, Healthcare Quality risks, Information and Cyber security risks, Data Privacy risks, Reputational risks, Human Capital risks, ESG risks, Operational risks, Catastrophic risks etc.

Risk Action or Treatment

We implement targeted risk treatment strategies to minimise, avoidance, or transfer identified risks ensuring we safeguard our operations, reputation and long-term value creation.

We embed risk management deeply into our day-to-day operations, making it a core component of decision-making across all functions, departments, and hierarchical levels.

We ensure alignment across the organisation to ensure cohesive and effective risk handling, enabling timely interventions while minimising disruptions to business continuity. We cultivate a culture of continuous risk awareness, encouraging teams to remain alert, adaptive and responsive to emerging challenges in real-time, thereby strengthening our organisational resilience and considering risk management as "business as usual".

Risk Communication and Reporting

We acknowledge that risks cannot be eliminated, so our control systems focus on timely and effective risk management. Risks are continuously monitored, with monthly leadership reviews and quarterly updates to the Risk Management Committee (RMC). The RMC annually evaluates the risk portfolio, mitigation strategies, and their alignment with business goals. Residual risks are escalated to senior management, and Key Risk Indicators (KRIs) support oversight by business units, the RMC, and the Board. We embed risk management as a business-as-usual (BAU) practice across all levels of the organisation, ensuring that every employee, function, and decision-making process is aligned with our risk-aware culture.

We regularly review and update our de-risking strategies to validate their effectiveness and confirm that they are successfully reducing our exposure to evolving threats.

Our Chief Risk Officer (CRO) plays a pivotal role in keeping the Board, Risk Management Committee and Executive Leadership Team well-informed, enabling timely oversight and strategic course corrections where necessary.

We utilise a combination of expert insights, digital risk tools, and structured self-assessments to continuously track and monitor risk exposures across the enterprise.

We conduct annual enterprise-wide risk reviews, involving the Board, Risk Management Committee, Leadership, and the CRO, to re-evaluate risk priorities and ensure alignment with our strategic direction.

Robust Risk Culture

The Risk culture is reflected in the values and behaviors Aster displays when managing risk. Aster works to promote a responsible risk culture in the following ways:

By the leadership and behaviors demonstrated by the management By requiring individuals to take responsibility for managing risks By building skills and capabilities to support risk management By emphasizing the importance of risk management in business decisions