Aster DM Quality Care
Motilal Oswal upgrades Aster DM Quality Care with buy rating, cites 20% upside
Motilal Oswal Financial Services has initiated coverage on Aster DM Quality Care with a buy recommendation, setting a target price of ₹910. The brokerage noted the stock has gained nearly 24% year-to-date despite weak broader market sentiment driven by geopolitical tensions and high crude oil prices. The current level implies a 20% upside in the base case, with potential for up to 46% gains in a bull scenario and 8% downside in a bear case.
The stock, formed from the merger of Aster DM Healthcare and Quality Care India, is one of India’s leading integrated healthcare providers. On a yearly basis, it has risen 20%, reaching a 52-week high of ₹890.95 on 10 August after touching a low of ₹519.80 on 4 February. Year-to-date, the Sensex has fallen over 14%, highlighting the stock’s outperformance.
In September, the stock declined about 1% month-to-date following an 8% drop in August. On Monday, 28 September, it fell 2.5% to an intraday low of ₹740.05. However, over three and five years, it has delivered multibagger returns of 130% and 250% respectively, according to BSE data.
Motilal Oswal projects revenue, EBITDA, and PAT to grow at CAGRs of 19.5%, 25%, and 33% from FY26 to FY28, reaching ₹13,200 crore, ₹3,070 crore, and ₹1,560 crore. Return on capital employed and return on equity are expected to improve by 430 and 540 basis points to 13.6% and 15.9% respectively over the same period. The brokerage cited the pace of Quality Care synergy realisation and capacity ramp-up as key factors influencing the bull, base, and bear cases.
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