20 September 2024

Update | Healthcare

Max Healthcare
BSE SENSEX S&P CNX
84,544 25,791 CMP: INR1,068 TP: INR1,240 (+16%) Buy
On an expansion spree
 Max Healthcare (MAXHEALT) has aggressively increased its bed capacity through
both organic and inorganic routes over the past three years.
Bloomberg MAXHEALT IN
 Going forward, MAXHEALT plans to add 2,400 beds to its total bed capacity of
Equity Shares (m) 972
M.Cap.(INRb)/(USDb) 1038 / 12.4 ~6,700, with a capex of INR40-45b over the next 3-4 years.
52-Week Range (INR) 1090 / 531  Despite heavy capex, the company has comfortably maintained its liquidity position.
1, 6, 12 Rel. Per (%) 17/23/63  MAXHEALT has strategically expanded its presence in the UP market over the
12M Avg Val (INR M) 1698 past six months and has established itself as a key player in this market.
Free float (%) 76.3  We value MAXHEALT on an SOTP basis (35x EV/12M forward EBITDA for the
hospital business, 26x EV/12M forward EBITDA for Maxlab, and 6x EV/sales for
Financials Snapshot (INR b)
Max@Home) to arrive at our TP of INR1,240. Reiterate BUY.
Y/E MARCH FY24 FY25E FY26E
Sales 68.2 83.6 100.6 Expansion in the western and northern regions augurs well
EBITDA 18.7 22.2 26.8  MAXHEALT has aggressively increased its bed capacity through both organic
Adj. PAT 13.3 15.2 18.6 and inorganic means. Since FY21, the total bed capacity has risen by 931,
EBIT Margin (%) 23.3 21.4 21.9 reaching 4,302 beds, of which ~81% were added through inorganic means.
Cons. Adj. EPS (INR) 13.7 15.6 19.1
 Since FY21, the company has acquired five hospitals with a combined bed
EPS Gr. (%) 18.6 13.9 22.4
BV/Sh. (INR) 95.9 111.4 130.5 capacity of 1,950 at a total cost of INR30b. The acquired entities also
Ratios include land parcels, which will allow for further expansion of bed capacity
Net D:E (0.0) 0.1 (0.1) over time. This expansion has been financed through a mix of internal
RoE (%) 15.3 15.1 15.8 accruals and external debt. Despite such major investment, the company
RoCE (%) 13.5 13.3 14.6
maintains a strong liquidity position, with scope for further expansion.
Payout (%) 0.0 0.0 0.0
Valuations  Over the next 3-5 years, the company plans to increase its bed capacity by
P/E (x) 72.3 63.5 51.9 ~55-60%, with a total investment of INR40-45b.
EV/EBITDA (x) 51.3 43.6 35.6  The synergies from current facilities, combined with a strong liquidity
Div. Yield (%) 0.0 0.0 0.0 position, will support the company in achieving growth both organically
FCF Yield (%) (0.3) (0.5) 1.8
and inorganically.
EV/Sales (x) 14.1 11.6 9.5
Emerging as a dominant player in UP
Shareholding Pattern (%)  UP is the most populous state in India with a per capita income of INR93k
As On Jun-24 Mar-24 Jun-23 as of FY24, according to NSDP.
Promoter 23.7 23.8 23.8
 Although UP is ranked second in terms of healthcare expenditure, still the
DII 15.4 15.0 11.9
FII 57.0 57.3 59.9 state is underpenetrated in terms of good healthcare infrastructure.
Others 3.9 4.0 4.5  Earlier MAXHEALT had a strong presence in the Delhi-NCR region. Over the
FII includes depository receipts past six months, MAXHEALT has become the dominant player in the UP
Stock Performance (1-year) market with acquisition of Sahara Hospital and Jaypee Healthcare.
 With these acquisitions, MAXHEALT is well positioned to cater to the
Max Healthcare
Nifty - Rebased patient pool of western and central UP.
980  Further, the company is planning to add more beds, increase clinical
860 talents, and improving capabilities in niche therapies.
Valuation and view
740
 MAXHEALT registered a robust 96% CAGR over FY21-24. We expect 20%/
620
18% EBITDA/PAT CAGR over FY24-FY26 fueled by a higher ARPOB, addition
500 of new beds, and improved occupancy at existing hospitals.
Jul-24
Nov-23

May-24
Sep-23

Mar-24

Sep-24
Jan-24

 We value the stock on an SOTP basis (35x 12M forward EV/EBITDA for the
hospital business, 26x EV/EBITDA for the MaxLab business, and 6x EV/sales
for Max@home) to arrive at our TP of INR1,240. Reiterate BUY.
Tushar Manudhane - Research Analyst ([email protected])
Research Analyst: Akash Dobhada ([email protected]) | Viraj Shah ([email protected])
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Max Healthcare

Growing aggressively in West/North India

 MAXHEALT has aggressively increased its bed capacity through both organic and
inorganic means. Since FY21, the total bed capacity has risen by 931, reaching 4,302
beds, of which ~81% were added through inorganic means.
 Since FY21, the company has acquired five hospitals with a combined bed capacity of
1,950 at a total cost of INR30b. While the beds are being added in a phased manner,
the total bed additions from these hospitals would be ~1,950.
 This expansion has been financed through a mix of internal accruals and external debt.
Despite such major investment, the company maintains a strong liquidity position,
with scope for further expansion.
 The company plans to increase its bed capacity by ~55-60%, with a total investment of
INR40-45b over the next 3-5 years, to reach 4,302 beds.
 Of the total planned expansion, ~79% of the total capacity will be brownfield in
nature, while the remaining 21% will be greenfield expansion.
 Moreover, the company’s liquidity position is expected to further strengthen after
strong contribution from its new facilities.

Exhibit 1: MAXHEALT’s expansion timeline

2021 2022 2023-24 1QFY25

Commissioned 122 beds

at the Max super
Raised INR1.2b equity Acquired a stake in specialty hospital,
through QIP Eqova Healthcare, Shalimar Bagh
having the potential to
add 400+ beds in East
Delhi Acquired 100% stake in Max to acquire 64%
the 200-bed Alexis stake in the 800-
Acquired exclusive rights Hospital, Nagpur
to aid the development
bedded Jaypee
of a 500-bed hospital in Healthcare Limited
South Delhi1 (JHL) for a
Acquired 550 bed Sahara consideration of
Executed an operation Hospital, Lucknow
and maintenance INR16b
agreement with
Secured a prime land Muthoot Hospital for Acquired a land parcel in
parcel in Gurugram for 300+ beds at Dwarka Shaheed Path Lucknow
adding 1,000 beds Delhi with the potential to add
550 beds

Source: MOFSL, Company

Expansion into new geographies to boost growth

 Since FY21, the total bed capacity of MAXHEALT has increased by 27%, reaching
4,302 as of 1QFY25.
 Of the total capacity expansion, 753 beds are attributed to inorganic growth,
while the remaining 178 beds result from organic growth as of 1QFY25.
 Since FY21, the cumulative capex for MAXHEALT stood at INR30b. Despite heavy
capex, the company’s net debt-to-EBITDA improved from 0.8x in FY21 to a net
cash-to-EBITDA of 0.1x in FY24.

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 Max Healthcare

Exhibit 2: Aggressive bed capacity expansion to support growth

Bed Capacity Operational Beds Occupancy (%)
75 76 75 75

65
3,999 4,302
3,371 3,412 3,504

3,114 3,246 3,282 3,798 3,787

FY21 FY22 FY23 FY24 1QFY25

Source: MOFSL, Company

Exhibit 3: Despite significant capex… Exhibit 4: …the company’s liquidity position remained strong
Ongoing Capex (INRb) Acquisition Capex (INRb) Net debt (INRm) Net debt/EBITDA (x)
0.9
15.1
0.3
5440 4410

-7330 0.0
5.3
4.4 -220
1.4 2.1
-0.5

FY22 FY23 FY24 FY21 FY22 FY23 FY24

Source: MOFSL, Company Source: MOFSL, Company

 Recently, as part of its strategic expansion plan, MAXHEALT acquired a 64% stake
in Jaypee Healthcare to gain control of operational hospitals (550 beds at Noida,
200 beds at Bulandshahr, and a 100-bed non-operational hospital at Anoopshahr).
MAXHEALT will also gain access to a large land parcel (18 acres in Noida/5.7 acres
in Bulandshahr), providing ample opportunity for future expansion.
 In FY24, MAXHEALT acquired a 550-bed hospital (with 250 beds currently
operational) in Lucknow from Sahara, as well as a 200-bed hospital from Alexis
Hospital in Nagpur. Both the facilities have sufficient land available for future
brownfield capacity expansion.
 MAXHEALT acquired the 303-bed Dwarka Hospital in South Delhi in Feb’22 and
commissioned it in Jul’24.
 Given its financial health, there is further scope for expansion for MAXHEALT.

20 September 2024 3
 Max Healthcare

Exhibit 5: Strong synergies from its past acquisitions

Cost of
Year of
Company Location acquisition Synergy/Outlook
acquisition
(INR m)
Jaypee Healthcare Noida Sep-24 16,000  Acquired a 64% stake for an EV/EBITDA valuation of 24x
 The 500-bed (376 operational beds) JHL, located on an 18-acre land
parcel in Sector 128, Noida, is easily accessible from Delhi, Noida,
and Yamuna Expressway.
 Max is doubling its bed capacity at a capex of INR7b in next 24
Sahara Hospitals Lucknow Feb-24 9,400
months
 Max plans to operationalize another 140 beds by end-FY25E
 MAXHEALT aims to tap into the burgeoning medical value travel
segment by attracting patients from neighboring countries and the
Middle East
Alexis Hospital Nagpur Feb-24 4,120  Acquired 100% stake in the 200-bed Nagpur-based Alexis Hospital
 The facility has the potential to be expanded to 340 beds on a land
parcel of two acres.
 Under phase I, 250 beds will be commissioned in 1HFY26, and 150
Eqova Healthcare Patparganj Feb-22 470
beds will be operationalized under phase II.
 Upfront purchase of 26% stake, with an Escrow mechanism set up
for additional 34%.
 The hospital will be located on NH24 expressway and falls on the
metro corridor, ~300 meters from the IP Extension Metro Line. The
site is close to the existing 402-bed Max Hospital, Patparganj, which
has been consistently reporting high level of occupancies (more
than 75%). The hospital shall thus have both revenue and cost
synergies with the existing facility.
 The 303-bedded Phase I hospital was commissioned in Jul'24 and is
O&M for
Dwarka South Delhi Jan-22 spread across 8.62 acres of land. It has the potential to add another
300 beds
1,000+ beds.
 The hospital is equipped with high-end technology, 125 doctors, and
~480 medical staff.
 The company expects breakeven in the next 6-9 months.
 The rapidly growing urban population in Dwarka has integrated
townships, group housing projects, and diplomatic enclave for 39
countries. Dwarka is well connected to the international airport,
Delhi Metro, and the new Dwarka Expressway Project once
completed. This will provide connectivity with Manesar and New
Gurgaon as well.
Total 29,990
Source: MOFSL, Company

Brownfield-focused expansion over the next 3-4 years

 MAXHEALT plans to add another 2,400 beds by FY27, reaching 6,702 beds for a
cumulative capex of INR43b.
 The company plans to add ~580 beds in Maharashtra, 1,126 beds in Delhi, 440
beds in Lucknow, and 155 beds in Mohali.
 Of the total planned expansion, ~79% of the total capacity will be brownfield in
nature, while the remaining 21% will be greenfield.
 The company has land parcels in Delhi, Greater Noida, Lucknow, Sector-53
Gurugram, and Mullanpur with the potential to add ~400-500 beds at each of
these locations over a longer period.
 As of Mar’24, MAXHEALT was in a net cash position of INR18b, thus providing it
enough headroom for capacity expansion.

20 September 2024 4
 Max Healthcare

Exhibit 6: MAXHEALT plans ~56% bed capacity expansion in the next 3-4 years
Nanavati Lucknow, Gomti Nagar Sec. 56 Gurugram Saket Complex (Smart) Mohali Patparganj Nagpur
300 6,702
271
155 140
140 375 250
4,302 501
268

Jul'24 FY25 FY26 FY27 Total

Source: MOFSL, Company

Status of expansion plans

 Lucknow Hospital (590 beds): Finishing work for operationalizing additional 140
beds has started, while the refurbishing work on the existing facility is underway.
The facility has received environmental clearance (EC) approval for setting up a
new 450-bed tower, whose work is expected to complete within 24 months.
 Max Vikrant Phase I (415 beds): The company has received environmental
clearance (EC) and consent to establish (CTE), while it is awaiting forest
approval. The company expects delay due to ongoing litigation involving DDA
and Delhi Government regarding cutting out trees in the eco-sensitive zone near
Asola Bhati Wildlife Sanctuary and the Ridge areas without approval.
 Max Smart – Saket (375 beds): The site is fully mobilized and column
installation has begun. The company expects project completion by 1QFY26.
 Sector 56, Gurgaon Phase I (300 beds): Basement slabs are nearing completion,
and project completion for Phase I is expected by 2QFY26.
 Nanavati Phase I (268 beds): The project is expected to be completed by end-FY25.
 Patparganj Phase I (250 beds): Post issuance of the no objection certificate
(NOC) by the fire and water departments, the company has submitted the
drawings for approval.
 Mohali (155 beds): Work on the 2nd floor slab is underway, while the work on
ramp area side is reaching ground level. The company expects completion by
1QFY26.
 Nagpur hospital (140 beds): The application for environmental clearance (EC)
for adding 115 beds on two additional floors has been filed. It expects approval
over the next 2-3 months and project completion in 24 months.
Exhibit 7: Brownfield-focused expansion to be margin
accretive Exhibit 8: Capex per bed likely to be INR18m

Greenfield Brownfield Greenfield

21%
INR15b INR15b

501

INR13b 961
530
408
Brownfield
79%
FY25 FY26E FY27E
Source: MOFSL, Company Source: MOFSL, Company

20 September 2024 5
 Max Healthcare

Emerging as a dominant player in UP

 UP is the most populous state in India with a per capita income of INR93k as of FY24,
according to NSDP.
 Although UP is ranked second in terms of healthcare expenditure, still the state is
underpenetrated in terms of good healthcare infrastructure.
 Being a sizeable and lucrative market, several private players are exploring the UP
healthcare market. Over the last six months, MAXHEALT has become the dominant
player in the UP market with a series of acquisitions.
 In Feb’24, MAXHEALT acquired the Lucknow Hospital (550 beds) and in Sep’24, it
acquired JHL (800 beds).
 With huge land parcels both at Lucknow and JHL (Noida, Bulandshahr, and
Anoopshahr) MAXHEALT is investing in ramping up these facilities with new capacities.
 Further, the company is adding new clinical talents and new capabilities in niche
therapies, which would drive growth in ARPOB over the medium term.
 Moreover, these acquisitions would aid MAXHEALT in expanding its footprint in north-
western/central India and part of eastern UP.

Aggressively tapping the UP market with a series of acquisitions

 UP is the most populous state in India with a per capita income of INR93k as of
FY24, as per NSDP. Western UP has the highest per capita income in the state.
 According to the FY24 budget, UP is ranked second in terms of healthcare
expenditure in India, standing at 7% of total spending.
 As per the National Health Profile 2022, UP is ranked among the top states in
India to have the highest number of people diagnosed with NCDs at 0.9m.
 Over the past six months, MAXHEALT is aggressively expanding its footprint in
the UP market and has emerged as a dominant player in this market.
 From Feb’24, MAXHEALT is on an acquisition spree in the UP market with the
acquisition of the Sahara Hospital in Lucknow (550 beds in central UP).
Subsequently, it acquired JHL (800 beds) in western UP near Noida.
 With these two acquisitions, MAXHEALT is well-positioned to penetrate the
northwestern, central, and eastern UP, while also working to expand its capacity
and capabilities to strengthen its presence in the overall UP market.

20 September 2024 6
 Max Healthcare

Exhibit 9: Expansion in the UP markets

MAXHEALT has
7 hospitals in
the Delhi region

Since Feb’24
added 3 beds in
the UP market

Source: MOFSL, Company

20 September 2024 7
 Max Healthcare

Exhibit 10: Noida Hospital to cater to the untapped markets, including Mathura/Hathras/Hapur/Aligarh

Jaypee Hospital
Noida

Jaypee Noida to cater to the

Mathura, Hathras, Aligahr,
and Hapur regions, as there
are no multispecialty
hospitals available in these
areas

Source: MOFSL, Company

20 September 2024 8
 Max Healthcare

Exhibit 11: MAXHEALT to cover the northwestern UP market through its Bulandshahr and Anoopshahr hospitals

Location of the Bulandshahr

and Anoopshahr hospitals

MAXHEALT to ramp up the

Bulandshahr and Anoopshahr
hospitals with additional capacity
and capabilities; MAXHEALT to tap
the adjacent markets with higher
density of population and lower
healthcare penetration

Source: MOFSL, Company, Bloomberg

20 September 2024 9
 Max Healthcare

Exhibit 12: Varanasi, Kanpur, and Gorakhpur could be the next destinations for the hospital industry

JHL’s Noida Hospital located in the heart of the city

 MAXHEALT will acquire ~64% stake in JHL for an EV/EBITDA valuation of 24x (EV-
INR16.6b) and organize debt for the repayment (CIRP – Corporate Insolvency
Resolution Process) of admitted claims of JHL's financial creditors for a total
outflow of INR16b.
 For FY24, JHL reported revenue of INR4.2b and EBITDA of INR700m, resulting in
an EBITDA margin of 17%. MAXHEALT is expected to raise a short-term loan of
up to ~INR10b to settle outstanding claims from JHL creditors.
 The 500-bed (376 operational beds) JHL, located on an 18-acre land parcel in
Sector 128, Noida, is the flagship hospital and is easily accessible from Delhi,
Noida, and Yamuna Expressway. The hospital offers specialties such as
Oncology, Renal Sciences, Orthopedics, Cardiology, Neurology, and Diagnostic
facilities.
 Following the acquisition, MAXHEALT has the potential to increase the bed
capacity in the area to 1,200 in Noida.

JHL well placed to tap the north western UP market

 JHL operates a 200-bed multi-specialty hospital in Bulandshahr (UP) on 5.75
acres of land, and a non-operational hospital in Anoopshahr (UP) spanning 2.35
acres.
 Besides the JHL hospital in Bulandshahr, there is only one other multispecialty
hospital, Orthocare (100 beds), while Anoopshahr has no multispecialty
hospitals.

20 September 2024 10
 Max Healthcare

 These hospitals are ~2.0-2.5 hours away from the Noida hospital, allowing
MAXHEALT to tap into the untapped market of the western UP region.
Moreover, since higher-density regions such as Moradabad, Bijnor, Bareilly,
Rampur, Kanpur, and Sikandarabad generally have limited access to
multispecialty hospitals, this would further reduce the travel time for patients
and improve access to healthcare facilities.

MAXHEALT is investing in new capabilities at Lucknow

 MAXHEALT had entered into a share purchase agreement to acquire a 100%
stake in Starlit Medical Centre Pvt. Ltd (STARLIT) for an EV of INR9.4b and a bed
capacity of 550 beds.
 As of Jun’24, STARLIT had an operational bed capacity of 250, revenue of
INR560m (+25% YoY) and an EBITDA margin of 19.6%.
 To enhance the hospital's capabilities, the firm is hiring additional clinical staff.
Moreover, the oncology department, which currently contributes less than 2%
to the Lucknow Hospital's revenue, is planning to expand, which will boost both
ARPOB and overall hospital revenue.

MAXHEALT on track to increase capacity in Lucknow in the medium term

 Additionally, the organization is now working on renovating the current
facilities. The company plans to operationalize the extra 140 beds by end-CY24.
 Sahara Hospital is situated on a land parcel of ~27 acres at Gomti Nagar,
Lucknow, and has a built-up area of ~82,673 sqm spread across 17 floors.
 Moreover, the company is setting up the new tower, adding a 450-bed capacity
over the next 24 months for an investment of INR7b. The company has received
environmental clearance for the development of this hospital.
 With this acquisition, MAXHEALT entered into one of the most promising cities
from healthcare perspective. Additionally, the under-penetrated healthcare
infrastructure in central/eastern UP and Bihar would aid the scale-up of
hospitals even faster.

Exhibit 13: Strong capex cycle on the cards across all major hospitals
Hospitals Current Beds Bed addition (FY25-27) % addition
MEDANTA 2354 950 40.4
APHS 8700 2860 32.9
MAXHEALT 4302 2400 55.8
NARH 5794 0 0.0
KIMS 3975 2385 60.0
RAINBOW 1935 690 35.7
FORH 4613 715 15.5
JUPITER 961 575 59.8
YATHARTH 1605 1450 90.3
ASTER DM 4869 1677 34.4
Source: MOFSL, Company

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 Max Healthcare

Exhibit 14: P/E chart Exhibit 15: EV/EBITDA chart

P/E (x) Avg (x) Max (x) EV/EBITDA (x) Avg (x) Max (x)
Min (x) +1SD -1SD Min (x) +1SD -1SD
62 48
56.2
39.9 35.1
50 38
45.1 31.8
35.0
38 49.4 28 24.0
25.0 18 16.1
26
17.6 9.7
14 8

Jul-22
May-21

May-24
Mar-23
Aug-20

Nov-22
Jan-21

Aug-23

Dec-23
Feb-22

Sep-24
Oct-21
Jun-21

Jun-23
Nov-21

Apr-22

Nov-23

Apr-24
Aug-20

Sep-22

Sep-24
Jan-21

Jan-23

Source: MOFSL, Company, Bloomberg Source: MOFSL, Company, Bloomberg

20 September 2024 12
 Max Healthcare

Story in charts
Exhibit 16: Expect 6% CAGR in ARPOB over FY23-FY25 Exhibit 17: Occupancy to fall due to bed additions in FY25

ARPOB (INR'000) Occupancy (%)

51 50 59 67 76 80 85 73 65 75 76 75 73 69

FY20 FY21 FY22 FY23 FY24 FY25E FY26E FY20 FY21 FY22 FY23 FY24 FY25E FY26E

Source: Company, MOFSL Source: Company, MOFSL

Exhibit 18: Network revenue to clock 21% CAGR over Exhibit 19: EBITDA margin to contract 170bp to 25.8% over
FY23-25 FY23-25
Revenue (INRb) EBITDA (INRb) EBITDA margin (%)
27.4 27.5 26.2
26.0 25.8

16.9
14.8

40 36 52 59 68 84 101 6 6 13 16 19 22 26

FY20 FY21 FY22 FY23 FY24 FY25E FY26E FY20 FY21 FY22 FY23 FY24 FY25E FY26E

Source: Company, MOFSL Source: Company, MOFSL

Exhibit 20: EPS to clock 15% CAGR over FY23-25 Exhibit 21: ROE to stabilize at ~15% over FY24-26

EPS (INR) ROE (%)

1.3 1.8 9.1 11.6 13.7 15.3 18.3 6.2 3.8 14.1 15.2 15.3 14.8 15.2

FY20 FY21 FY22 FY23 FY24 FY25E FY26E FY20 FY21 FY22 FY23 FY24 FY25E FY26E

Source: Company, MOFSL Source: Company, MOFSL

20 September 2024 13
 Max Healthcare

Financials and valuations

Consolidated - Income Statement (INR m)
Y/E March FY21 FY22 FY23 FY24 FY25E FY26E
Total Income from Operations 36,010 51,710 58,750 68,150 83,588 1,00,595
Change (%) -10.6 43.6 13.6 16.0 22.7 20.3
Total Expenditure 29,920 38,270 42,680 49,420 61,370 73,837
% of Sales 83.1 74.0 72.6 72.5 73.4 73.4
EBITDA 6,090 13,440 16,070 18,730 22,218 26,758
Margin (%) 16.9 26.0 27.4 27.5 26.6 26.6
Depreciation 2,160 2,480 2,600 2,840 4,309 4,763
EBIT 3,930 10,960 13,470 15,890 17,909 21,996
Int. and Finance Charges 1,870 1,120 390 -380 -7 151
Other Income 280 470 290 350 585 654
PBT bef. EO Exp. 2,340 10,310 13,370 16,620 18,501 22,499
EO Items -2,790 -500 -390 -670 -190 0
PBT after EO Exp. -450 9,810 12,980 15,950 18,311 22,499
Total Tax 500 1,430 -300 3,160 3,296 3,937
Tax Rate (%) -111.1 14.6 -2.3 19.8 18.0 17.5
Minority Interest 0 0 0 0 0 0
Reported PAT -950 8,380 13,280 12,790 15,015 18,562
Adjusted PAT 1,755 8,807 11,226 13,316 15,171 18,562
Change (%) 34.2 401.8 27.5 18.6 13.9 22.4
Margin (%) 4.9 17.0 19.1 19.5 18.1 18.5

Consolidated - Balance Sheet (INR m)

Y/E March FY21 FY22 FY23 FY24 FY25E FY26E
Equity Share Capital 9,660 9,696 9,696 9,696 9,696 9,696
Total Reserves 47,721 57,484 71,004 83,254 98,269 1,16,830
Net Worth 57,380 67,180 80,700 92,950 1,07,965 1,26,526
Minority Interest 0 0 0 0 0 0
Total Loans 11,280 9,180 6,820 11,770 15,770 5,770
Deferred Tax Liabilities 1,580 1,850 -500 370 370 370
Capital Employed 70,240 78,210 87,020 1,05,090 1,24,105 1,32,666
Gross Block 29,900 37,100 39,210 57,290 69,386 78,655
Less: Accum. Deprn. 2,160 2,480 2,600 5,440 9,749 14,511
Net Fixed Assets 27,740 34,620 36,610 51,850 59,637 64,144
Goodwill on Consolidation 37,730 37,730 37,730 42,670 46,670 46,670
Intangibles 6,580 6,880 6,810 7,370 7,370 7,370
Capital WIP 0 0 0 7,620 7,524 4,755
Total Investments 20 20 20 660 660 660
Curr. Assets, Loans & Adv. 17,779 17,192 22,997 20,776 26,737 38,541
Inventory 740 830 1,040 1,060 1,495 1,799
Account Receivables 3,157 4,533 4,340 6,000 7,328 8,819
Cash and Bank Balance 6,660 6,150 15,650 12,860 8,733 16,875
Loans and Advances 7,222 5,679 1,967 856 9,180 11,047
Curr. Liability & Prov. 19,609 18,233 17,147 25,856 24,493 29,474
Account Payables 3,946 5,667 6,438 10,170 9,258 11,138
Other Current Liabilities 7,574 8,369 5,940 10,155 8,451 10,171
Provisions 8,089 4,197 4,768 5,531 6,784 8,164
Net Current Assets -1,830 -1,040 5,850 -5,080 2,244 9,068
Appl. of Funds 70,240 78,210 87,020 1,05,090 1,24,105 1,32,666
E: MOFSL Estimates

20 September 2024 14
 Max Healthcare

Financials and valuations

Ratios
Y/E March FY21 FY22 FY23 FY24 FY25E FY26E
Basic (INR)
EPS 1.8 9.1 11.6 13.7 15.6 19.1
Cash EPS 4.0 11.6 14.3 16.7 20.1 24.1
BV/Share 59.2 69.3 83.2 95.9 111.4 130.5
DPS 0.0 0.0 0.0 0.0 0.0 0.0
Payout (%) 0.0 0.0 0.0 0.0 0.0 0.0
Valuation (x)
P/E 589.9 117.6 92.2 77.7 68.2 55.8
Cash P/E 264.4 91.7 74.9 64.1 53.1 44.4
P/BV 18.0 15.4 12.8 11.1 9.6 8.2
EV/Sales 25.7 20.1 17.5 15.2 12.5 10.2
EV/EBITDA 152.1 77.3 63.9 55.2 46.9 38.3
Dividend Yield (%) 0.0 0.0 0.0 0.0 0.0 0.0
FCF per share 4.7 4.4 17.8 -3.3 -4.9 18.2
Return Ratios (%)
RoE 3.8 14.1 15.2 15.3 15.1 15.8
RoCE 14.6 13.5 17.2 13.5 13.3 14.6
RoIC 18.2 13.8 19.2 16.4 15.4 16.7
Working Capital Ratios
Fixed Asset Turnover (x) 1.2 1.4 1.5 1.2 1.2 1.3
Asset Turnover (x) 0.5 0.7 0.7 0.6 0.7 0.8
Inventory (Days) 8 6 6 6 7 7
Debtor (Days) 32 32 27 32 32 32
Creditor (Days) 40 40 40 54 40 40
Leverage Ratio (x)
Current Ratio 0.9 0.9 1.3 0.8 1.1 1.3
Interest Cover Ratio 2.1 9.8 34.5 -41.8 -2,601.2 145.9
Net Debt/Equity 0.1 0.0 -0.1 0.0 0.1 -0.1

Consolidated - Cash Flow Statement (INR m)

Y/E March FY21 FY22 FY23 FY24 FY25E FY26E
OP/(Loss) before Tax 2,340 10,310 13,370 15,950 18,311 22,499
Depreciation 2,160 2,480 2,600 2,840 4,309 4,763
Interest & Finance Charges 1,870 1,120 390 -730 -592 -503
Direct Taxes Paid -500 -1,430 300 -3,160 -3,296 -3,937
(Inc)/Dec in WC 2,275 -1,300 2,609 8,141 -11,450 1,318
CF from Operations 8,145 11,180 19,269 23,041 7,281 24,139
CF from Operating incl EO 8,145 11,180 19,269 23,041 7,281 24,139
(Inc)/Dec in FA -4,060 -6,880 -1,990 -26,260 -12,000 -6,500
Free Cash Flow 4,085 4,300 17,279 -3,219 -4,719 17,639
(Pur)/Sale of Investments 21,360 0 0 -640 0 0
Others 280 470 290 350 -3,415 654
CF from Investments 17,580 -6,410 -1,700 -26,550 -15,415 -5,846
Issue of Shares 615 37 0 0 0 0
Inc/(Dec) in Debt -7,990 -2,100 -2,360 4,950 4,000 -10,000
Interest Paid -1,870 -1,120 -390 380 7 -151
Dividend Paid 0 0 0 0 0 0
CF from Fin. Activity -9,246 -3,183 -2,750 5,330 4,007 -10,151
Inc/Dec of Cash 16,480 1,587 14,819 1,821 -4,127 8,142
Opening Balance 4,110 6,660 6,150 15,650 12,860 8,733
Closing Balance 6,660 6,150 15,650 12,860 8,733 16,875

Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

20 September 2024 15
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NOTES

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 Max Healthcare

Explanation of Investment Rating

Investment Rating Expected return (over 12-month)
BUY >=15%
SELL < - 10%
NEUTRAL < - 10 % to 15%
UNDER REVIEW Rating may undergo a change
NOT RATED We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall be within following 30 days take
appropriate measures to make the recommendation consistent with the investment rating legend.
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inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months

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- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or
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