Aster DM Healthcare will be investing Rs 950 crore before the end of next fiscal on setting up new hospitals in India and Gulf region. The healthcare chain with operations in India and Gulf region will be adding new hospitals, clinics and pharmacies in the current as well as next fiscal. In India, this year it will commission a Greenfield project – 200-bed multi-specialty hospital in Kerala’s Kannur district and a 220-bed hospital in Bangalore, which is under operation and management contract. Next year, it will enter the Chennai market with a 500-bed tertiary care hospital. Meanwhile, it will add one hospital in GCC this year and two more next year. It will also open a few clinics and pharmacies in both markets.

“The total capex on the new projects is estimated to be Rs 950 crore. Of this, we will raise additional debt of Rs 150 crore and the rest will be funded through internal accruals,” said Azad Moopen, chairman of Aster DM Healthcare.

Aster DM Healthcare had raised $125 million through two rounds of private equity investment and had gone public in February this year. It operates 20 hospitals, 112 clinics and 213 pharmacies in GCC, India and Philippines. The company had clocked revenues of Rs 6766 crore in FY18. In the June quarter of this fiscal, the company reported top-line growth of 14 per cent to touch Rs 1774 crore against 1556 crore in the year ago quarter. The company has delivered Rs 20 crore net profit in the last quarter against a loss of Rs 80 crore in the same quarter last year.

“Two of our hospitals were in the gestation period last year and they accounted for the loss. This year those hospitals have turned EBITDA positive. Hence we are seeing profits in this June quarter,” he said.

According to him, the company’s presence in GCC is an added advantage it has compared to its peers in the healthcare space. Due to the long-term lease model it follows in the GCC market, the capex requirement is lower and hence the projects breakeven faster. Further, the pricing in the region is much higher compared to India. Hence, GCC accounts for 83 per cent of the revenues and a significant portion of the profits despite having lesser number of hospitals and beds.

“While from a ROCE point of view GCC is an important market, India has a large market and going ahead we expect the ROCE to improve in India as well,” he added. The company is looking at asset-light model for the future hospital projects. The upcoming Chennai project too is on long-term lease model.