Max Healthcare Q3 Results Review - Healthy Growth Despite Seasonality, High Base: Prabhudas Lilladher

Prabhudas Lilladher Report

Max Healthcare Institute Ltd.'s reported Ebitda of Rs 4.7 billion (up 15% YoY) which came in-line with our estimates, aided by higher average revenue per occupied bed at Rs 76,800/day; up 15% YoY. The company showed phenomenal growth (19% Ebitda compound annual growth rate) over FY22-24, despite negligible capacity additions. We expect pick-up in the growth momentum given-

1. Strong expansion plans (plus 3000 additional beds over FY24-27E),

2. Improving payor mix (lower revenue contribution from low margin institutional versus 18% now) and

3. Bolt on acquisitions like recently added unit in Lucknow.

Operational efficiency has also been commendable, especially in competitive markets like NCR. Our FY25E/26E Ebitda stands increased by 4%/11% and we expect Ebitda/profit after tax to grow ~2 times over FY24-27E.

We ascribe 30 times enterprise value/Ebitda and 40 times price-to-earnings ration based on FY26E.

Maintain ‘Buy’ rating with revised target price of Rs 925/share and remains our top pick in space.

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