Buy Max Healthcare Institute; target of Rs 500: Prabhudas Lilladher

Prabhudas Lilladher's research report on Max Healthcare Institute

We broadly maintain our FY24E EBIDTA, however reduce for FY25E by 5% as we factor slight delay in capacity expansion. Max Healthcare Institute' (MAXHEALT) Q3FY23 EBIDTA came above our estimates by 6%, aided by better occupancy (77% in Q3 vs 78% in Q2) in a seasonally weak quarter. MAXHEALT has shown phenomenal growth in past two years and we expect this momentum to continue given 1) strong expansion plans (+1500 additional beds by FY25E end), 2) improving payor mix (15% revenue contribution from institutional by FY25E vs 17% now) and 3) scale up in labs. Operational efficiency has also been commendable, especially in competitive markets like NCR. We expect 14% EBIDTA CAGR over FY23-25E.

Outlook

We ascribe 24x EV/EBIDTA based on Dec 2024E and maintain ‘BUY’ rating with TP of Rs 500/share.

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