Aster DM Health share price jumps over 5% as JM Financial upgrades stock to ’buy’, predicts 34% upside

Aster DM Healthcare share price jumped by over 5% during Wednesday’s trading session after JM Financial upgraded the stock rating from HOLD to BUY, setting a target price of ₹532, which suggests a potential upside of 34%.

In its report, the brokerage mentioned that, following its merger with Quality Care India Limited (QCIL), the company is set to become one of the top three hospital chains in India in terms of bed capacity. However, the stock has seen a decline of approximately 24% year-to-date due to a broader market downturn. Similar to its competitors, the company is projected to achieve strong revenue growth supported by a double-digit increase in bed capacity and enhancing ARPOBS.

Around two-thirds of the new bed additions will come from brownfield projects, which are expected to enhance the EBITDA margins for the merged entity. Furthermore, the merger’s synergies are likely to lead to a 2-3% improvement in operational efficiency.