Thread by @Rajat_Gupta_RG

Thread on Aster DM Healthcare:
#SpecialSituation #Brownfield #AssetLight

Special Thanks to:
@AdityaKhemka5 - for idea generation
@soicfinance - for teaching how to analyse the sector
@NeilBahal - for educating us on special situations

1st on the sector - Sector is shallow cyclical.
The hospital industry, like the hotel ind, is consolidating, and well-known brands are drawing more interest
According to estimates, this industry might offer 7.7 trillion dollars in opportunity in FY25, up from 4.5 trillion in FY22

Business Model:
In this sector, companies have considerable pricing power and control how many days a customer use their services, how much he/she spend, among other factors.
Where the hospital provides the complete ecosystem, customer stickiness is inevitable.

He/She is your customer for every need. (Diagnosis, Pharmacy or Treatment at different levels)

Aster DM is creating the same ecosystem for its patients:
Aster Labs, Pharmacy, Clinics, Innovative and Research Centre and all equiped with digital initiatives.

Aster DM is making new capacity on low capex model (either brownfield or on long term lease) which helps to become asset light.
With better capacity utilisation breakeven arrives early.

When the capital allocation changes in the businesses of such sector, things turns for good.

On Sp. Situation: Co. is thinking over listing GCC and Indian Business seperately. Much needed demand from investors to unlock value.

I still remember me pitching this idea to a 20 yr old, a year ago, tried my best to simplify valuation explaining to him why i think it's cheap.

It won't be done here. when we make our own efforts, we learn and, via investing, we also make money ;)
For one's new to investing-
1) compare its valuation to other hospital in India.
2) thn do SOTP valuation for both entities seperately.

Hope it helps - Happy to connect :)