Buy Max Healthcare Institute target of Rs 1200 Prabhudas Lilladher

Prabhudas Lilladher's research report on Max Healthcare Institute

Max Healthcare Institute (MAXHEALT) reported EBITDA of Rs 5.7bn (up 14% YoY); in-line with our estimates. The company showed phenomenal growth (18% EBITDA CAGR) over FY22-24, despite negligible capacity additions. We expect pick-up in the growth momentum given 1) strong expansion plans (+3500 additional beds over FY24-27E), 2) improving payor mix and 3) Bolt on acquisitions like recently added in Lucknow, Nagpur and Noida. Operational efficiency has also been commendable, especially in competitive markets like NCR.

Outlook

Our FY25E/26E EBITDA remains unchanged and we expect EBITDA/PAT to grow ~2x over FY24-27E. We ascribe 32x EV/EBITDA based on FY27E. Maintain ‘BUY’ rating with TP of Rs. 1,200/share (Earlier at Rs975/share) and remains our top pick.

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