MAXHEALTH is currently trading at 24x FY25E EV/EBITDA, representing a premium to its historical average of 22x. Moreover, it is also trading at a premium to its hospital peers (21x FY25E EV/EBITDA). However, we expect MAXHEALTH to continue trading at a premium on relative basis, backed by: a) significant land bank availability in high-demand areas of Delhi for brownfield expansion, b) focused approach to improve profitability per bed, and c) proven capability of strong turnaround of hospital assets. In fact, given strong demand tailwinds on account of a) increased insurance penetration, b) higher international patient flow, and c) enhanced healthcare awareness, we expect the valuation at the sector level to further improve going forward.
OutlookWe reiterate BUY with a TP of INR660, based on SOTP (25x EV/EBITDA on 12M forward basis for hospital business, 17x EV/EBITDA for Max Lab business, and 4x EV/sales for Max @ Home business).
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