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Motilal Oswal Report
Max Healthcare Institute Ltd. reported a miss on earnings for Q1 FY24, primarily due to increased opex. Having said this, the company has been on track to enhance average revenue per occupied bed on the back of increased high end treatment and a greater proportion of international patients.
Additionally, with the growing demand for healthcare services Max Heathcare's focal cities, we expect occupancy to improve moving forward.
We maintain our earnings estimate for FY24/FY25. We value Max Healthcare at 25 times enterprise value/Ebitda to arrive at a price target of Rs 650 on 12 months roll-forward basis.
While better realisation and improving operational efficiency are the major factors driving 21% earnings compound annual growth rate over FY23-25, it is implementing efforts for bed additions (780 beds; 23% increase from current bed size) to growth momentum over the next three to five years.
It continues to evaluate the inorganic opportunities as well. We reiterate our 'Buy' rating on the stock.
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