Prabhudas Lilladher's research report on Max Healthcare Institute
Max Healthcare (MAXHEALT) reported EBITDA of Rs 4bn (up 9% QoQ) vs our estimate of Rs3.9bn. Overall occupancy stood at 78% vs 74% in Q1 on seasonality, while ARPOB remained steady QoQ at Rs.66K due to medical mix obligation. The company became net cash positive by Rs. 420mn vs Rs. 2.1bn of net debt in Q1. Operational efficiency has also been commendable, especially in competitive markets like NCR. MAXHEALT has shown phenomenal growth in past two years and we expect this momentum to continue given 1) strong expansion plans, 2) improving payor mix and 3) scale up in labs. Our FY23E and FY24E EBITDA broadly remains unchanged.
We expect 17% EBITDA CAGR over FY22-25E. We ascribe 24x EV/EBITDA (22x earlier) to hospital segment and 25x EV/EBITDA to diagnostic segment. Maintain ‘Buy’ rating with increased TP of Rs 500/share (earlier at Rs 427/share), as we roll forward to Sept 2024.