Aster DM Health. (ASTERDM)

FairStock Score: 40/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Latest quarter profitable with sales ₹1,186 Cr and net profit ₹59 Cr; recent sales growth 8.50%
• Solid balance sheet indicators: Altman Z-Score 4.62 and debt/equity 0.46
• Piotroski F-Score 7/9 suggests decent operational health
• Free cash flow of ₹6,440 Cr provides financial flexibility
• Promoter holding 40.39% aligns interests with minority shareholders

Concerns

• Profit growth collapsed to -93.80%; P/E 94.14 and EV/EBITDA 124.77 leave no room for error
• 5-year revenue CAGR of -13.63% shows long-term shrinkage
• Price ₹687.80 is far above Graham Number ₹93.13 and DCF value ₹622.69, implying negative margin of safety
• ROE 10.71% and ROCE 10.68% are modest for a stock trading at 11.67 times book value

AI Analysis

At ₹687.80, Aster DM is not the kind of business Graham or I would buy. The market capitalization is ₹33,916 Cr, but the latest quarter only earns ₹59 Cr on sales of ₹1,186 Cr. That translates into a P/E of 94.14 after profit growth of -93.80%. When I buy a stock, I want a margin of safety; here the Graham Number is ₹93.13 and DCF value is ₹622.69, both below the price. The negative margin of safety, at -602.91%, tells me the price already prices in a perfect turnaround and more. Long-term revenue tells a disturbing story: 5-year revenue CAGR is -13.63%, even though recent sales grew 8.50%. So is this a temporary setback or a permanently impaired franchise? I don't yet know. The balance sheet is not alarming: debt/equity 0.46, Altman Z-Score 4.62, Piotroski 7/9. Free cash flow of ₹6,440 Cr looks huge, but I would need to prove it is operating cash flow and not one-time proceeds; book value is only ₹58.94 per share. The business earns ROE of 10.71%, yet the market pays 11.67 times book. That's a low-quality return at a premium price. Promoter holding at 40.39% is a positive, but good ownership cannot justify 124.77 EV/EBITDA. The logical category is a turnaround, and I only invest in turnarounds when the price compensates me for uncertainty. This price does not. I will watch to see if margins and profitability recover before committing capital.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer