Aster DM Healthcare Limited — Q4 FY26 earnings call

Call held 1 May 2026

Management summary

Aster DM Healthcare reported a strong Q4 and full-year FY26, both on a standalone and combined proforma basis with Quality Care. The company saw robust revenue and EBITDA growth, driven by increased patient volumes, improved ARPP IP, and a favorable case mix. The merger with Quality Care is progressing well, with NCLT approval pending. Despite some regional challenges like a nurse strike and competition, management expressed confidence in continued growth and margin expansion through disciplined capacity additions and operational efficiencies.

Highlights

  • Combined proforma Q4 FY26 revenue grew 18% YoY to INR 2,361 crores, driven by 12% increase in patient volumes and 8% improvement in ARPP IP.

  • Combined proforma Q4 FY26 Operating EBITDA grew 25% YoY to INR 517 crores, leading to margin expansion to 21.9% and ROCE improvement of 293 bps to 21.1%.

  • Aster standalone Q4 FY26 revenue (ex-Kasargod) grew 17% YoY to INR 1,166 crores, with Operating EBITDA (ex-Kasargod) growing 31% YoY to INR 253 crores and Normalised PAT growing 32% YoY to INR 153 crores.

  • QCIL achieved FY26 EBITDA of INR 1,066 crores, breaching the INR 1,000 crores mark for the first time, representing a 24.1% YoY growth and margins of 23.0%.

  • Aster Labs demonstrated a significant turnaround, with Operating EBITDA margins expanding from negative 7.6% in FY24 to 12.8% in FY26, driven by 32% YoY growth in external business.

Concerns

  • The newly launched Kasargod hospital incurred losses of INR 19-20 crores in Q4 FY26, impacting Aster's overall standalone margins.

  • Aster's Karnataka IP volumes grew only 3% in Q4 FY26, attributed to de-empanelment of low-yield schemes and high competition intensity in North Bangalore.

  • Macro headwinds led to a decline in Medical Value Travel (MVT) from the UAE for Aster, though this was offset by growth from Maldives and African markets.

Key financials

  1. Combined Proforma Revenue ₹2,361 Cr +18%YoY
  2. Combined Proforma Operating EBITDA ₹517 Cr +25%YoY
  3. Combined Proforma EBITDA Margin 21.9%
  4. Aster Standalone Revenue (ex-Kasargod) ₹1,166 Cr +17%YoY
  5. Aster Standalone Operating EBITDA (ex-Kasargod) ₹253 Cr +31%YoY
  6. Aster Standalone Normalised PAT (ex-Kasargod) ₹153 Cr +32%YoY

What they filed

Q1 FY27: revenue up 21.6%, net profit down 69.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,086 1,050 1,000 1,078 1,197 +10%1,186 +13%1,182 +18%1,311 +22%
EBITDA217 186 182 202 236 +9%202 +9%224 +23%256 +27%
Net profit106 64 86 94 121 +14%59 −8%154 +79%29 −69%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Aster Standalone (ex-Kasargod)
    ₹4,617 Cr FY26 Revenue₹969 Cr FY26 Operating EBITDA21% FY26 Operating EBITDA Margin₹451 Cr FY26 Normalised PAT22.8% FY26 ROCE
  • QCIL Standalone
    ₹4,630 Cr FY26 Revenue₹1,066 Cr FY26 EBITDA23% FY26 EBITDA Margin7% FY26 IP Volumes Growth10% FY26 OPD Volumes Growth58.7% FY26 CONGO-T Mix
  • Aster Labs
    181% Q4 FY26 Operating EBITDA Growth14.7% Q4 FY26 Operating EBITDA Margin12.8% FY26 Operating EBITDA Margin
  • Kerala Cluster (Aster)
    ₹604 Cr Q4 FY26 Revenue25.6% Q4 FY26 Operating EBITDA Margin (ex-Kasargod)51% Q4 FY26 MVT Growth
  • Karnataka & Maharashtra Cluster (Aster)
    ₹394 Cr Q4 FY26 Revenue24.5% Q4 FY26 Operating EBITDA Margin21% Q4 FY26 ARPP IP Growth
  • Andhra Pradesh & Telangana Cluster (Aster)
    30% Q4 FY26 Revenue Growth113% Q4 FY26 Operating EBITDA Growth18.3% Q4 FY26 Operating EBITDA Margin

Capital allocation

high confidence
  • Capex ₹2,700 Cr
    • Add ~2,500 beds (Aster) ₹2,700 Cr
    • Add ~1,700 beds (QCIL) - 1,500 brownfield, 200 greenfield ₹2,000 Cr
    • Annual CAPEX spend for existing facility refresh and incremental clinical programs (QCIL)
    Over the next four years, we plan to add ~2,500 beds at the cost of INR 2700 crores. Of this INR 350 crores has been invested up to March 2026, with the remaining amount to be deployed over the next 3-4 years, supporting our next phase of growth while maintaining our focus on disciplined capital allocation and sustainable profitability. (Aster, Page 12) ; Looking ahead, we plan to add nearly 2,500 beds over the coming years through a balanced mix of greenfield and brownfield expansions, which will take our total capacity to over 8,150 beds. This includes planned brownfield expansion of 150 beds in MIMS Calicut as well as 130 beds in MIMS Kannur. (Aster, Page 6) ; Of the total, ~1,500 beds are planned to be added through brownfield expansions while the balance ~200 will come from greenfield projects. (QCIL, Page 9) ; I think I give you a sense about 1,700 odd beds will get added. 2,000 odd crores of expense will happen for those 1,700 beds, which is what we call the project capex. (QCIL, Page 20) ; annual CAPEX spend to spruce up the existing facility or to add clinical programs. So generally, the breakup is 3-2, which is 3% is spent in terms of refreshing what we've already spent and 2% becomes incremental every year. (QCIL, Page 21)
  • Debt Gross ₹701 Cr
    We continue to maintain a robust liquidity position, with cash and cash equivalents of INR 1,327 crores, while our gross debt remains moderate at INR 701 crores. (Aster, Page 12)
  • M&A Quality Care Merger · Pending regulatory

    To create a combined platform with enhanced scale, operating profile, and capital efficiency, reinforcing underlying strength of the model.

    Combined proforma Q4 FY26 revenue of INR 2,361 crores (up 18% YoY) and Operating EBITDA of INR 517 crores (up 25% YoY).

    As we move closer to completing the proposed merger with Quality Care, I would like to thank our shareholders for their continued confidence and support in approving the scheme. With this milestone behind us, the transaction now awaits final approval from the NCLT. Even ahead of formal completion, the combined proforma performance provides a very useful view of the potential scale and operating profile of the two organizations together. (Alisha Moopen, Page 3)
  • Liquidity Cash ₹1,327 Cr
    We continue to maintain a robust liquidity position, with cash and cash equivalents of INR 1,327 crores, while our gross debt remains moderate at INR 701 crores. (Aster, Page 12)

Guidance & targets

Capacity

  • Total Bed Capacity (Combined) Capacity · future · High confidence 15,000+ beds
    Our pipeline includes 4,445 additional beds, which will take our total capacity beyond 15,000 beds through a balanced mix of greenfield and brownfield expansions.

    — Alisha Moopen

  • Aster Bed Additions Capacity · coming years · High confidence ~2,500 beds
    Looking ahead, we plan to add nearly 2,500 beds over the coming years through a balanced mix of greenfield and brownfield expansions, which will take our total capacity to over 8,150 beds.

    — Alisha Moopen

  • QCIL Bed Additions Capacity · next 3-4 years · High confidence ~1,700 beds
    I think I give you a sense about 1,700 odd beds will get added. 2,000 odd crores of expense will happen for those 1,700 beds, which is what we call the project capex.

    — Varun Khanna

Capex

  • Aster Capex for New Beds Capex · next 3-4 years · High confidence INR 2,700 crores
    Over the next four years, we plan to add ~2,500 beds at the cost of INR 2700 crores. Of this INR 350 crores has been invested up to March 2026, with the remaining amount to be deployed over the next 3-4 years

    — Sunil Kumar

  • QCIL Annual Capex Spend (% of revenue) Capex · annual · High confidence 5%
    Our guidance on CAPEX has always been clear. We've stuck to the same number. 5% is the CAPEX spend when it comes to the annual CAPEX spend to spruce up the existing facility or to add clinical programs.

    — Varun Khanna

Profitability

  • CONGO Mix Contribution (Aster) Profitability · future · Medium confidence 60-65%

    From 55% today

    We are sitting at, I think, a blended level now, 55% CONGO contribution. We think we can definitely take it up to 60% and then 65% as well.

    — Alisha Moopen

Volume

  • IP Volume Growth (Aster K&M Cluster) Volume · next one to two quarters · Medium confidence mid to high single digit

    From 3% today

    So, we expect to go to mid to high single digit. Good thing is that all the doctors what we have gotten now, already they're in the stability. So, we expect the volumes to trickle down in next one to two quarters.

    — Sunil Kumar

Margin

  • EBITDA Margin (Aster Whitefield) Margin · future · Medium confidence more than mid 20s

    From high teens today

    And from the EBITDA margin point of view, I think only in the Whitefield you ask for, it's already in the high teens, right? High teens are the margin. With the Whitefield coming up, I think then you can look at more than mid 20s is the margin what we are expecting to reach.

    — Sunil Kumar

Growth

  • QCIL Growth Momentum & Margin Expansion Growth · next two years · Medium confidence continue
    Yes, I do. I mean, we've gone to a solid start, and I do see that the margin expansion as well as the top line growth will continue. I think the strategy is firing.

    — Varun Khanna

What to watch in Q1 FY27

NCLT Approval for Aster-QCIL Merger

within this quarter (Q1 FY27)
Current Awaiting final approval
Target Merger becomes effective

Why it matters

Finalization of the merger is crucial for realizing combined operational and financial benefits, and unlocking synergies.

The next hearing is expected in May, and upon receipt of the order, the merger will become effective. Based on current timelines, we expect the process to be completed within this quarter.

Risks & concerns

  • Initial losses from newly operationalized hospitals

    medium

    Kasargod hospital incurred INR 19-20 crores in losses in Q4 FY26, but management expects it to break even quickly.

    Management acknowledged

  • Macro headwinds affecting Medical Value Travel (MVT) from specific regions

    medium

    Decline in MVT from UAE was offset by increased patient flows from Maldives and African markets.

    Management mitigated

  • High competition intensity in certain regions (e.g., North Bangalore)

    medium

    Competition led to some attrition of clinical teams, but management successfully brought them back, demonstrating strength of clinical ecosystem.

    Management managed

  • Impact of nurse strike on Kerala operations

    low

    A temporary and modest impact was observed in Kerala due to a nurse strike, which has since been settled with a small pay increase.

    Management acknowledged

Q&A highlights

7 direct
Impact of common insurance empanelment on private hospitals Partial
I think fundamentally, while a lot of conversations have happened, there are two things that are bothering the industry around it. One is data privacy. Still, I don't think the insurance companies have really figured out a way to ensure data privacy across so many hospitals and the other is transparency as to how this is being done.

Analyst raised a potential industry-wide threat, and management indicated it's not currently impacting them due to data privacy and transparency concerns, suggesting it's not a near-term risk for large players.

Asked by Tausif Shaikh

Kerala MVT growth and resolution of nurse strike Direct
Kerala story has done well again. Overall performance has been really good. Especially MVT, has done 41% year-on-year growth has been registered. We have seen attraction from across the Middle East as well as Maldives and African countries... And yeah, the strike is called off.

Addressed concerns about regional headwinds, confirming strong MVT growth from new geographies and successful resolution of the nurse strike, which was a potential operational disruption.

Asked by Tausif Shaikh

Strategies for attracting and retaining clinical talent Direct
One, we had a bigger vision for Aster and especially when it comes to, as you rightly mentioned, about Bangalore market, it is very competitive and we are having not only three units now and we are adding another two more units in Bangalore... So that's where I think the clinicians are quite happy about, and they are pretty much with Aster.

Highlighted management's approach to talent acquisition in competitive markets, emphasizing vision, high-end procedures, and a strong clinical ecosystem as key differentiators.

Asked by Damayanti Kerai

Synergies from Aster-QCIL merger vs. QCIL's prior internal mergers Direct
First of all, the synergies that I've alluded to are pre-Aster QCIL merger. So, these are, you've got to understand that within QCIL also, we are in a way merging three companies... We've still not started the work on Aster QCIL synergies really, and they will start to flow in post-merger.

Clarified that previously reported QCIL synergies were internal, indicating that additional synergies from the Aster-QCIL merger are yet to materialize and will provide future benefits.

Asked by Kunal Randeria

Cost profile and margin impact of Aster's greenfield expansion Direct
If you look at the last year, you saw only Kasargod commencing the operations sometime in October. And if you look at the margin profile, the impact is hardly 60 basis points... Next in the FY27 you look at we have got already two Brownfield expansion which have started... which is EBITDA accretive.

Provided transparency on the initial losses from new facilities like Kasargod but reassured that brownfield expansions are expected to be EBITDA accretive, mitigating concerns about future margin dilution from new capacity.

Asked by Kunal Randeria

Slow IP volume growth in Aster's Karnataka cluster and impact of low-yield schemes Direct
What we exited is a low-yield schemes. I think we have very clearly called out, it is a government scheme, it is a low-yield scheme. The ARPOB compared to a cash market, it is less than 50%. That's how it's been and good thing is that we exited that.

Explained the strategic rationale behind de-empaneling low-yield schemes, indicating a focus on higher-value patients and optimizing capacity for better ARPOB, despite a temporary impact on IP volumes.

Asked by Siddharth Negandhi

Specific AI and robotics implementation within Aster/QCIL Direct
We've been able to bring in CDSS, which is Al-enabled, we've been able to bring in call center support, which is Al enabled. We're looking at solutions that can actually save time for the doctors when the patient comes into the OPD by pre-populating some of the EMR work through Al.

Provided concrete examples of AI adoption across clinical and operational aspects, demonstrating a commitment to technology-driven efficiency and improved patient care, which can enhance metrics.

Asked by Siddharth Negandhi

QCIL's per bed capex for brownfield and greenfield units Direct
Greenfield will come to about INR 1.5 crores and brownfield will go down to about in the range of INR 0.8-1.0 crores, depending again on complexity but there's no one number.

Provided specific cost estimates for different types of bed additions, offering clarity on capital efficiency for future expansion projects.

Asked by Vivek Sethia

3 min read 6 chapters

Detailed narrative

Strong Combined Proforma Performance and Merger Progress

The combined proforma performance of Aster DM Healthcare and Quality Care demonstrated robust growth in Q4 FY26, with revenue increasing 18% YoY to INR 2,361 crores and Operating EBITDA growing 25% YoY to INR 517 crores, achieving a margin of 21.9%. For the full year FY26, combined revenue reached INR 9,273 crores (up 14% YoY) and Operating EBITDA was INR 2,013 crores (up 21% YoY), with margins at 21.7%. The merger with Quality Care received overwhelming shareholder and creditor approval and is now awaiting final NCLT approval, expected to be completed within the current quarter.

Aster Standalone Performance Driven by Volume and Mix

Aster's standalone operations (excluding Kasargod) reported a 17% YoY revenue growth to INR 1,166 crores in Q4 FY26 and a 12% YoY growth to INR 4,617 crores for FY26. Operating EBITDA (ex-Kasargod) grew 31% YoY to INR 253 crores in Q4 FY26, with margins at 21.7%. This performance was supported by a 15% increase in total patient volumes, a 9% improvement in ARPP IP, and a strategic shift towards higher-acuity care, evidenced by 25% YoY growth in cardiology revenues and 23% YoY growth in oncology revenues.

QCIL's Operational Excellence and Milestone EBITDA

Quality Care (QCIL) delivered an 18% YoY revenue growth to INR 1,178 crores in Q4 FY26, with EBITDA growing 23% YoY to INR 272 crores, achieving a 23.1% margin. For FY26, QCIL's EBITDA reached INR 1,066 crores, marking the first time it breached the INR 1,000 crores mark, representing a 24.1% YoY growth. This was driven by a 10% increase in IP volumes, 9% increase in OP footfalls, and a 20% growth in CONGO-T revenue, which now constitutes 58% of total revenue.

Cluster-wise Performance and Strategic Focus (Aster)

The Kerala cluster showed resilience with 21% YoY revenue growth and 35% YoY EBITDA growth (ex-Kasargod) to 25.6% margins, despite a nurse strike. The Karnataka & Maharashtra cluster grew revenue by 11% YoY, with ARPP IP increasing 21% and EBITDA growing 25% YoY to 24.5% margins, driven by higher-value procedures. The Andhra Pradesh & Telangana cluster demonstrated significant operating leverage, with revenue growing 30% YoY and Operating EBITDA more than doubling (113% YoY) to 18.3% margins.

Capacity Expansion and Future Capex Plans

Aster added 290 beds in FY26, taking its total capacity to 5,449 beds, with a pipeline to add ~2,500 more beds over the coming years at a cost of INR 2,700 crores. QCIL plans to add ~1,700 beds (1,500 brownfield, 200 greenfield) over the next 3-4 years with an estimated investment of INR 2,000 crores. The blended per-bed capex for QCIL is INR 1-1.1 crores, with greenfield at INR 1.5-1.6 crores and brownfield at INR 0.8-1.1 crores, reflecting a disciplined approach to capital allocation.

Clinical Talent Acquisition and Technology Integration

Both Aster and QCIL emphasized strategies for attracting and retaining clinical talent, focusing on vision, high-end procedures, and a strong clinical ecosystem. QCIL highlighted its use of AI in patient safety, operations, and clinical care, including AI-enabled CDSS, call center support, EMR pre-population, and an AI-enabled radiotherapy platform. This focus on technology aims to enhance metrics and improve efficiency.

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