At 09:58 AM, with Rs 1.07 trillion market cap, Max Healthcare was trading 4 per cent higher at Rs 1,099.65, as compared to 0.13 per cent gain in the benchmark index.
India’s healthcare sector is experiencing major growth and transformation, driven by various factors, including increased government expenditure, rising health insurance penetration, and a growing demand for healthcare services.
The Indian hospital sector’s market capitalisation has increased nine-fold from Rs 375 billion in FY20 to Rs 3.5 trillion in FY24, owing to improved pricing, higher insurance penetration, and a focus on complicated treatments such as transplants. This trend is likely to intensify over the coming decade, Max Healthcare said in FY24 annual report.
The company is a prominent integrated healthcare service provider, engaged in provision of healthcare services through primary care clinics, multi speciality Hospitals / medical centres and super-speciality hospitals facilities. These include ‘managed facilities’ and medical facilities of third party healthcare service providers with whom, the Company has entered into long term service contracts for providing operation and management, medical services, clinical, radiology, pathology services and related healthcare services.
Both Max Hospital Nagpur and Lucknow have successfully met key post-merger integration objectives and currently are focused on expanding their service offerings through facility upgrades, bed additions, recruitment of top medical talent and advanced clinical programs. Further, both the facilities have demonstrated strong financial performance in Q1FY25, achieving robust growth in revenues and earnings before interest, tax, depreciation and amortisation (Ebitda) over the same period last year.
With launch of Max Super Specialty Hospital, Dwarka, the company has added over 900 beds to its capacity so far and have successfully supplemented the momentum of growth in revenues and profitability before augmentation of bed capacity through brown field expansion plans in FY26, the management said while announcing the June quarter (Q1FY25) results on August 1.
Meanwhile, Max Healthcare has aggressively increased its bed capacity through both organic and inorganic routes over the past three years. Going forward, the company plans to add 2,400 beds to its total bed capacity of ~6,700, with a capex of Rs 4,000-4,500 crore over the next 3-4 years.
Despite heavy capex, the company has comfortably maintained its liquidity position. Max Healthcare has strategically expanded its presence in the UP market over the past six months and has established itself as a key player in this market, Motilal Oswal Financial Services said in a company update. The brokerage firm reiterates ‘Buy’ rating on the stock with a target price of Rs 1,240 per share, as it expect 20 per cent/18 per cent Ebitda/PAT compound annual growth rate (CAGR) over FY24-FY26 fuelled by a higher average revenue per occupied bed (ARPOB), addition of new beds, and improved occupancy at existing hospitals.
First Published: Sep 24 2024 | 10:24 AM IST
