ASTER intends to expand its bed capacity by 1759 in the Kerala and Karnataka regions over the next 3-4 years. The company announced a capex of Rs. 1000 crore to support this growth, which we believe will be pivotal for fostering the company’s growth trajectory.
The company plans to acquire these beds through a mix of owned, leased, and operations and maintenance (O&M) models. Currently, the company boasts an occupancy rate of 70%, Avg Revenue Per Operating Bed (ARPOB) of Rs. 39300, and an operating profit margin (OPM) of 17%. By implementing an asset-light model, which involves leasing land instead of buying it, the company aims to improve its margin by 200-300 basis points.