Exchange: BSE | Sector: Healthcare | Industry: Medical Care Facilities
Q3 2024
Published: Dec 31, 2024
Earnings Highlights
Revenue of $328.90M up 49.2% year-over-year
EPS of $1.36 increased by 216.3% from previous year
Gross margin of 78.2%
Net income of 26.85M
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Asarfi Hospital Ltd (ASARFI.BO) QQ3 2024 Earnings Analysis: Robust YoY Revenue Growth, Margin Resilience and Prudent Cash Flow Management in Indian Medical Care Facilities
Executive Summary
Asarfi Hospital Ltd reported Q3 2024 revenue of INR 328.9 million, marking a 49.2% year-over-year increase and implying strong demand for hospital services. Despite scale-driven cost of revenue, gross profit reached INR 257.1 million with a gross margin of 78.2%, supported by favorable product/service mix and cost containment. EBITDA stood at INR 78.5 million, delivering an EBITDA margin of 23.9%, while operating income was INR 39.0 million (operating margin ~11.9%). Net income came in at INR 26.8 million, translating to a net margin of 8.2% and an EPS of INR 1.36 for the quarter. Free cash flow was modest at INR 3.37 million, with operating cash flow of INR 4.16 million and capital expenditure of INR 0.79 million, reflecting disciplined capital allocation in a capital-intensive sector.
Liquidity remains solid with INR 1.76 billion in cash and cash equivalents/short-term investments against INR 319.1 million of total debt, yielding a net debt position of INR 143.2 million. The current ratio of 1.80 and a quick ratio of 1.73 indicate adequate short-term liquidity, while a CCC of -47.4 days underscores inventory efficiency and favorable vendor terms. The balance sheet shows strong total assets of INR 1.54 billion and stockholders’ equity of INR 704.1 million, along with a notable accumulated OCI balance of INR 507.3 million, suggesting strategy-driven accounting reserves or revaluation effects. Yoy improvements across revenue, gross profit, operating income, and net income highlight a positive operating trajectory, though management commentary (earnings transcript) is not available in the data provided.
Key caveats include a moderate interest coverage of 3.32x and a debt-to-capitalization ratio of 0.384, indicating debt remains manageable but requires ongoing oversight as the hospital network expands. Overall, the QQ3 2024 results reinforce a constructive near-term outlook with robust margin stability and healthy cash flow generation, although investment considerations should weigh debt maturity, payer mix, and competitive dynamics within the healthcare facilities sector.
Balance sheet and liquidity
- Total assets: INR 1,540.88 million; Total liabilities: INR 836.81 million; Total equity: INR 704.07 million
- Cash and cash equivalents: INR 175.96 million; Net debt: INR 143.17 million; Total debt: INR 319.12 million
- Current ratio: 1.80; Quick ratio: 1.73; Cash ratio: 0.64
- Working capital: Positive, with DSO 98.83 days, DIO 28.48 days, DPO 174.74 days; Cash Conversion Cycle: -47.42 days
Cash flow and financial flexibility
- Net cash from operating activities: INR 4.16 million; Capex: INR -0.79 million; Free cash flow: INR 3.37 million
- Payouts: No dividends or stock repurchases disclosed in QQ3 data; Share count: ~19.74 million weighted average
- Cash generation supports debt service and capex flexibility, albeit free cash flow is modest in QQ3 2024.
Notes on comparables
- Public peer data in the provided dataset shows no direct peers for ASARFI.BO; hence sector/industry benchmarks are cited as qualitative reference rather than a numeric peer comparison.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
328.90M
49.22%
0.00%
Gross Profit
257.09M
100.52%
0.00%
Operating Income
39.05M
119.27%
0.00%
Net Income
26.85M
156.55%
0.00%
EPS
1.36
216.28%
0.00%
Key Financial Ratios
currentRatio
1.8
grossProfitMargin
78.2%
operatingProfitMargin
11.9%
netProfitMargin
8.16%
returnOnAssets
1.62%
returnOnEquity
3.47%
debtEquityRatio
0.62
operatingCashFlowPerShare
$2.9
freeCashFlowPerShare
$0.35
priceToBookRatio
2.54
priceEarningsRatio
18.34
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript or management commentary is provided for QQ3 2024. Therefore, there are no direct quotes or theme-based highlights to extract. If transcript access becomes available, we will consolidate themes around strategy, operations and market conditions with context and significance.
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Forward Guidance
There is no formal forward guidance disclosed in the QQ3 2024 data. Given the robust YoY growth in revenue and margin resilience, the near-term trajectory will likely depend on: (1) patient volume growth and mix, (2) capacity expansion and associated capex, (3) payer mix and reimbursement rates, and (4) cost discipline in SG&A and operations. In the absence of explicit guidance, scenarios suggest: base case with mid-to-high single-digit revenue growth in the next 2–4 quarters, margin stability if cost controls hold; bear-case if input costs rise or occupancy lags; bull-case if expansion drives higher occupancy and scale benefits. Key factors investors should monitor include occupancy rates, hospital capacity expansions, debt maturity profile, and regulatory changes affecting pricing and reimbursements.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ASARFI.BO Focus
78.17%
11.90%
3.47%
18.34%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
The QQ3 2024 results present a favorable near-term earnings trajectory driven by revenue growth and robust margins. The absence of a formal forward guidance introduces some execution uncertainty, but the liquidity profile and moderate leverage provide a stable platform for growth. Investors should monitor occupancy trends, capex deployment for capacity expansion, and the maturity of debt facilities. Given the strong YoY rebound in revenue and profitability alongside prudent capital management, ASARFI.BO appears to be a constructive long-duration healthcare exposure with upside potential if patient volumes rise and cost control remains disciplined. However, the lack of disclosed peer comparables and management commentary warrants cautious positioning until clearer guidance and competitive benchmarks emerge.
Key Investment Factors
Growth Potential
Expansion of the hospital network and services could sustain above-market revenue growth. The current period shows a strong YoY revenue rise with improving profitability; potential catalysts include higher occupancy, improved patient mix (inpatient vs. outpatient), and favorable capex deployment that enhances throughput.
Profitability Risk
Debt load and interest coverage remain a consideration, with net debt of INR 143.2 million and interest coverage of 3.32x. Regulatory shifts, payer mix volatility, inflation in healthcare costs, and competitive intensity in the India hospital sector are potential headwinds. The large accumulated OCI balance also warrants continued scrutiny to ensure earnings quality.
Financial Position
Solid liquidity with INR 175.96 million in cash and a current ratio of 1.80. Moderate leverage (D/E ~0.62) and conservative capital expenditure imply room for organic growth or selective acquisitions. The negative cash conversion cycle indicates efficient working capital management.
SWOT Analysis
Strengths
Strong gross margin (~78.2%) and EBITDA margin (~23.9%) for QQ3 2024, indicating high-value service mix and operational efficiency.
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