Aster DM Quality Care Ltd (ASTERDM) Q2 FY27 Results Analysis: EBIT Margin Expands 180 bps, Revenue Tops Q1 Run-Rate

Aster DM Quality Care Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 2,829.20 Cr (+136.32% YoY) and PAT growth of +165.75% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

First full post-merger quarter delivered revenue of Rs.2,829.20 Cr, 8.94% above the Q1 proforma run-rate, with segment EBIT margin up 180 bps YoY to 19.32% and pre-exceptional EBITDA margin of 23.45% tracking ahead of the 22% marker toward the 24-25% FY2028-29 target. Cost ratios improved across the board and cash conversion was healthy (CFO/PAT 1.80x), while the NCI profit share of 18.72% exceeded the guided 10-15% band and net debt of Rs.3,182.87 Cr reflects the enlarged perimeter. No prior guidance number was explicitly exceeded in the filing, so results are best characterized as on-track execution rather than a guidance beat.

Key Numbers, Quarter by Quarter

Key Investment Insights

Key Positives

• Revenue of Rs.2,829.20 Cr was 8.94% above the Q1 FY27 combined-proforma run-rate of Rs.2,597 Cr, indicating growth beyond the merger perimeter step-up
• Segment EBIT margin expanded to 19.32% from 17.52% YoY (+180 bps) and 17.89% QoQ (+143 bps)
• Statutory pre-exceptional EBITDA margin of 23.45% vs 20.87% a year ago, above the 22% marker on the path to 24-25% by FY2028-29
• Employee cost ratio fell to 16.46% of revenue from 18.48% in Q1 and 17.70% YoY; all major cost lines improved as a share of revenue
• 'Others' segment (Labs & Pharmacies) swung from a -19.50% margin a year ago to +11.52%
• H1 CFO of Rs.631.26 Cr was 1.80x consolidated PAT; H1 free cash flow of Rs.193.93 Cr
• Merger-related exceptionals tapered from Rs.114.38 Cr in Q1 to Rs.18.95 Cr in Q2

Risk Factors

• Hospitals & Clinics segment EBIT margin of 19.64% was 29 bps below the year-ago 19.93%
• NCI share of quarterly profit at 18.72% is above the 10-15% band management had guided to on prior calls
• Finance costs of Rs.118.98 Cr (vs Rs.30.76 Cr YoY) and net debt of Rs.3,182.87 Cr ex-leases reflect a meaningfully more leveraged post-merger perimeter
• Residual merger and consulting costs inside operating expense lines remain unquantified, so reported cost-ratio improvements could be marginally flattered