ASTERDM - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.2

🩺 Fundamental Analysis Summary

Aster DM Healthcare (ASTERDM) operates in a defensive sector with long-term tailwinds, but its current valuation and capital efficiency metrics raise caution for long-term investors. While the company has shown strong quarterly profit growth (+136% QoQ), its P/E of 76.9 and negative PEG ratio (-8.78) suggest that the stock is priced aggressively relative to sustainable earnings growth.

Metric Value Interpretation

P/E Ratio 76.9 Very high — priced for perfection

PEG Ratio -8.78 Negative — unreliable growth valuation metric

ROE / ROCE 10.5% / 10.7% Moderate — not ideal for long-term compounding

Dividend Yield 0.68% Low — minimal passive income

Debt-to-Equity 0.59 Manageable — but higher than ideal

EPS ₹108 Appears inflated — possibly due to accounting adjustments

PAT Growth (QoQ) +136% Strong — but needs consistency

Book Value ₹68.6 Price-to-book ~8.6× — expensive

RSI / MACD 49.9 / +0.58 Neutral — no strong momentum signal

DMA 50 / 200 ₹579 / ₹508 Price above long-term average — trend intact

52W Price Range ₹336 – ₹675 Currently near mid-range — not ideal for fresh entry

FII/DII Change -2.02% / +0.70% FII selling — cautious institutional sentiment

📉 Ideal Entry Price Zone

Entry Zone: ₹500 – ₹540

Closer to 200-DMA and below recent highs.

Wait for valuation compression or consistent PAT growth before entering.

🧭 Exit Strategy & Holding Period

Holding Period

2–3 years — suitable for medium-term growth if earnings momentum sustains.

Exit Strategy

Consider trimming if price exceeds ₹675 without matching ROE/ROCE improvement.

Reassess if ROCE remains below 12% or PEG ratio stays negative.

Key Metrics to Monitor

ROCE trending toward 15%

PEG ratio turning positive and below 2.0

PAT growth sustaining > 20% YoY

Debt-to-equity reducing below 0.4

🧠 Final Thoughts

Aster DM Healthcare has shown impressive short-term earnings momentum, but its long-term investment case is clouded by high valuation and moderate capital efficiency. It may suit tactical investors looking for healthcare exposure, but long-term investors should wait for better valuation or improved ROE/ROCE metrics. If already holding, monitor quarterly results closely and consider partial exit near ₹675 unless fundamentals improve.

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