Aster DM Healthcare Limited (NSE: ASTERDM) the healthcare provider reported consolidated revenue of ₹1,185.76 crore for the quarter ended December 31, 2025, driven by double-digit growth in its core hospital business. Management continues to prioritize the pending merger with Quality Care India Limited, which is expected to create one of the largest hospital networks in India with over 10,000 beds.
The company reported a 13% year-over-year increase in revenue from continuing operations for the third quarter of fiscal year 2026, reaching ₹1,185.76 crore. While consolidated profit for the period from continuing operations moderated slightly to ₹58.65 crore from ₹64.39 crore a year earlier, the result was impacted by non-recurring exceptional items, including provisions for new labor codes and merger-related professional fees.
The company’s stock performance remains tied to the execution of its large-scale Indian expansion and the formal integration of Quality Care India Limited (QCIL), which demonstrated robust standalone revenue growth of 17% during the same period.
Strategic Update
The company’s current strategic direction is centered on the proposed merger with Quality Care India Limited. On December 11, 2025, Aster DM Healthcare submitted a Scheme of Amalgamation to the National Company Law Tribunal. After the quarter-end, the NCLT directed the convening of meetings of shareholders and unsecured creditors between February 27 and March 13, 2026.
Separately, the board approved an internal capital restructuring involving the conversion of a ₹129.35 crore outstanding loan into equity in its wholly owned subsidiary, Aster DM Multispecialty Hospital Private Limited. The transaction is aimed at strengthening the subsidiary’s balance sheet ahead of potential external fund-raising, while retaining a minimum 75% ownership stake at the parent level.
Clinical Developments
Aster DM Healthcare reported progress in high-complexity clinical procedures during the quarter, with an emphasis on robotic and cardiovascular interventions. Key milestones included the first transcatheter Fontan procedure in Kerala at Aster Medcity and the first robotic-assisted revision knee replacement in Karnataka at Aster RV. The group also completed its first transcutaneous mitral valve replacement procedure at its Whitefield facility.
On the digital front, the “Aster Health” application surpassed 350,000 downloads. The platform provides patient access to radiology reports and images, supporting reduced reliance on physical films and paper-based records.
Financial Performance
Consolidated Results (Continuing Operations): Revenue for Q3 FY26 stood at ₹1,185.76 crore, compared to ₹1,049.81 crore in Q3 FY25.
Nine-Month Performance: For the period ended December 31, 2025, revenue from operations reached ₹3,460.84 crore, representing a 10% increase over the ₹3,138.12 crore recorded in the previous year.
• Margins and EBITDA: Operating EBITDA for Aster’s India business grew 11% to ₹224 crore, though margins compressed slightly to 18.9% from 19.3% YoY, primarily due to the initial operating costs of the newly commissioned Aster MIMS Kasargod.
• Segmental Contributions: The Hospitals segment remained the primary revenue driver, contributing ₹1,154.86 crore to quarterly revenue. The Kerala cluster achieved its highest ever quarterly revenue, growing 20% YoY, while the Karnataka & Maharashtra cluster saw 7% growth.
Investment Thesis: (Bull vs. Bear)
Bull Case:
• Merger Synergies: The combined proforma entity (Aster + QCIL) reported a 22% YoY growth in Operating EBITDA to ₹503 crore, with identified synergies expected to provide a near-term EBITDA upside of 10-15%.
• Expansion Pipeline: A robust growth roadmap is in place to add 4,080+ beds, aiming for a total capacity of 14,710+ beds through mostly brownfield expansions.
• Operational Maturity: Matured hospitals (over 7 years) currently operate at a 25.1% EBITDA margin, providing a stable cash flow base for newer facilities.
Bear Case:
• Margin Dilution from New Assets: Newer facilities (0-3 years), such as MIMS Kasargod, have an initial operating EBITDA margin of only 3.1%, which may weigh on overall group profitability during the ramp-up phase.
• Regulatory Headwinds: The notification of new Indian Labor Codes resulted in a ₹26.27 crore exceptional provision for gratuity and compensated absences this quarter.
• Execution Risk: The integration of QCIL remains subject to final NCLT approval and the successful realization of procurement and doctor-model synergies across diverse geographies.
Strategy & Expansion
Management’s strategy is focused on geographic concentration and bed capacity expansion in India. The company plans to increase Aster standalone bed capacity to over 7,800 beds through the addition of more than 2,300 beds over the coming years.
Near-term priorities include capacity expansion at Aster Whitefield and Aster Ramesh Ongole during FY26. Longer-term plans include the development of large-format facilities such as Aster Medcity, with planned capacity of over 950 beds, and Aster CMI, with more than 850 beds. These facilities are positioned to benefit from operating scale and higher-margin specialty mixes, including oncology and neurosciences.
Market Context
Aster DM Healthcare’s increased focus on the Indian market follows the completion of the separation of its GCC business in the previous financial year. The company is operating in an Indian healthcare sector undergoing consolidation, where scale and integrated physical-digital delivery models are becoming increasingly relevant.
The implementation of India’s four new labor codes, including the Code on Wages and the Code on Social Security, represents a regulatory shift for the sector. The changes require revisions to wage definitions and employee benefit provisions, with implications for cost structures across healthcare operators.