Buy Max Healthcare; target of Rs 700: Motilal Oswal

Motilal Oswal is bullish on Max Healthcare recommended buy rating on the stock with a target price of Rs 700 in its research report dated November 07, 2023.

Broker Research

November 10, 2023 / 14:08 IST

Buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on Max Healthcare

Max healthcare (MAX) delivered better-than-expected 2QFY24 financial performance. Healthy improvement in ARPOB, elevated occupancy at newly added beds as well as at existing beds drove EBITDA per bed to newer highs at INR7.5m (up 17% YoY/6.5% QoQ). We increase our FY25 earnings by 3% factoring in a) increased realization for institutional patients, b) faster pick-up in occupancy and better operational efficiency. We value MAX on an SoTP basis (25x 12M forward EV/EBITDA for hospital business, 18x 12M forward EV/EBITDA for diagnostic business, 4x 12M forward EV/sales for Max@home) to arrive at a price target of INR700. MAX is well-positioned to deliver 16%/17%/21% sales/EBITDA/PAT CAGR over FY23-25. This growth is underpinned by several key factors: a) addition of beds, b) improved realization per patient, and c) the optimization of case mix/payor mix. These strategies are expected to drive sustained profitability and consistent earnings growth for the company. Further, MAX continues to be on the look-out for any M&A opportunities, which can also aid better return ratios going forward. We reiterate our BUY rating on the stock.

Outlook

We increase our FY25 earnings by 3% factoring a) increased realization for institutional patients, b) faster pick-up in occupancy and better operational efficiency. We value MAX on SoTP basis (25x 12M forward EV/EBITDA for hospital business, 18x 12M forward EV/EBITDA for diagnostic business, 4x 12M forward EV/sales for Max@home) to arrive at a price target of INR700.

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