Aster DM Healthcare reported strong combined proforma performance for Q3 FY26, driven by broad-based growth across the Aster and Quality Care (QCIL) platforms. Combined revenue grew 15% YoY to INR 2,366 crore, with Operating EBITDA increasing 22% YoY to INR 503 crore, yielding a 21% margin. The company also confirmed significant procedural progress in its proposed merger with QCIL, with shareholder meetings expected in February/March 2026.
Q3 FY26 Combined Proforma Highlights
The management presented encouraging results for the combined platform (Aster and QCIL) for the quarter ending December 31, 2025. On a combined proforma basis, revenue grew 15% year-on-year (YoY) to INR 2,366 crore. This growth was supported by a 9% YoY increase in total patient volumes and an 8% YoY rise in Inpatient ARPP. The CONGO mix saw a notable increase of approximately 150 basis points to 54.4%.
Operating EBITDA grew faster than revenue, posting a 22% YoY increase to INR 503 crore, translating to an operating EBITDA margin of 21%. ROCE stood strong at 21%. This consistent, broad-based growth across the first three quarters of FY26 reflects improved operating quality, higher clinical complexity, and sustained cost discipline.
Aster Standalone Performance
Aster’s revenue from operations reached INR 1,186 crore, marking a 13% YoY increase, fueled by 10% growth in patient volumes and a 9% improvement in Inpatient ARPP. The commissioning of the new Kasargod hospital was a key contributor to revenue growth. Oncology revenue was a particular highlight, growing 27% YoY, contributing 11% to Q3 FY26 revenue (up from 10% last year).
Excluding the newly commissioned Kasargod hospital, Aster’s core network demonstrated significant operating leverage: revenue grew 12% YoY, and operating EBITDA grew 17% YoY, expanding margins by 90 basis points to 20.2%. The Kerala cluster remained a stability anchor, delivering 20% YoY revenue growth, driven in part by 64% YoY growth in Medical Value Travel (MVT) revenues.
Aster’s total capacity as of December 31, 2025, stood at 5,451 beds. The company plans to add over 2,300 beds in the next few years, aiming for a total capacity exceeding 7,800 beds.
QCIL Performance Update
QCIL demonstrated strong value creation with revenue rising 17.3% YoY to INR 1,181 crore. Post-Ind AS EBITDA increased 32.0% YoY to INR 279 crore, expanding the margin by 265 basis points YoY to 23.7%.
Growth drivers included improved specialty mix (CONGO-T share up 60 basis points to 57.6%) and favorable payor mix shifts. Mature units (over 7 years) saw 14% revenue growth and 17% EBITDA growth, achieving a robust ROCE of 36.2%. The diagnostics business (Aster Labs) achieved a significant turnaround, with YTD FY26 EBITDA margins reaching +12.2%.
Merger Progress and Synergies
Management noted that the merger with QCIL has progressed through key regulatory steps, including CCI approval. The shareholders’ meeting to approve the scheme is expected between February 27, 2026, and March 13, 2026, with the merger expected to complete in Q1 FY27. Synergies, particularly from procurement negotiation on a combined INR 2,000 crore purchasing base, are expected to materialize post-merger, with the target being a 24-25% margin threshold for the blended entity in 2-3 years.
Financial Deep Dive (Standalone)
For the quarter, excluding Kasargod, Aster’s revenues were INR 1,176 crore (12% growth), and Operating EBITDA was INR 237 crore (17% growth), yielding a 20.2% margin. Normalised PAT (Post NCI) was INR 98 crore (22% YoY growth).
For the 9 months ended December 31, 2025, India revenues reached INR 3,451 crore (10% growth), and Operating EBITDA grew 17% YoY to INR 715 crore (20.7% margin). Normalised PAT for the 9M period stood at INR 298 crore (19% YoY growth).
The diagnostics business is performing well, showing a transition from -7.6% EBITDA margin in FY24 to +7.6% in FY25. The wholesale pharmacy segment also moved to profitability, showing 2.2% EBITDA margin in Q3.
Segmental Growth Drivers and Operational Focus
Management emphasized the shift towards high-value care, noting that high-material cost segments like Oncology (27% YoY growth) and Cardiology (22% YoY growth) are key growth engines. The focus remains on driving the CONGO mix higher across the entire network, targeting mid-60s% over time.
Operational improvements included reducing the Average Length of Stay (ALOS) at Aster to 3.9 days (a 3.4% YoY reduction), driven by protocol adherence and higher short-stay procedures. Technology investments, including deploying five robotic systems and five Elekta LINACs, aim to enhance efficiency and democratize complex care, particularly in Tier 2 markets.
Source: BSE
