ICRA has upgraded Aster DM Healthcare’s long-term credit rating to [ICRA]A+, citing the company’s increasing scale and improved credit profile. The short-term rating has also been upgraded to [ICRA]A1+. This reflects Aster’s healthy revenue growth of 11.9% in FY2025 and improved operating profit margins, driven by efficient operations and a strong presence in South India.
Revised Credit Ratings
Aster DM Healthcare has received an upgrade to its credit ratings from ICRA. The long-term, fund-based term loan rating has been elevated to [ICRA]A+ from [ICRA]A and remains on ‘Rating Watch with Positive Implications’. The short-term ratings for fund-based and non-fund-based working capital facilities have been upgraded to [ICRA]A1+ from [ICRA]A1.
Rationale for Upgrade
The upgrade reflects Aster’s increasing scale of operations, improved credit profile in FY2025 and projected growth in revenues and earnings. FY2025 saw revenue growth of 11.9%, driven by higher ARPOB and inpatient volumes. Operating profit margins improved to 19.2% in Q1 FY2026 and 18.7% in FY2025, compared to 15.9% in FY2024.
Financial Highlights
Aster’s strong brand position in Kerala enables attraction and retention of top medical talent. The company derived 53% of its revenues in FY2025 and Q1 FY2026 from the Kerala market. Total Debt/OPBDITA stood at 2.3 times and Net Debt/OPBDITA at 0.8 times as of March 31, 2025.
Expansion Plans
The company plans to add approximately 2,600 beds in phases by FY2029, with capex estimated at ₹2,500 crore. Approximately ₹400 crore has been invested as of June 30, 2025. Funding will come from existing cash, internal accruals, and debt. In April 2024, Aster completed the sale of its GCC business with a consideration of ₹7,767.7 crore and recognized a gain of around ₹5,148.1 crore in FY2025.
Merger with QCIL
Aster’s ratings were placed on watch with positive implications following the announcement on November 29, 2024, that its board approved the merger with Quality Care India Limited (QCIL). The merger is expected to significantly improve Aster’s credit profile and is expected to be completed in Q4 FY2026.
Source: BSE
