Tag: Max Healthcare

Max Healthcare shares end 7% higher after 1.8 crore shares change hands in a block deal

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Max Healthcare Institute Ltd. ended nearly 7 percent higher at Rs 480.10 on the BSE on Wednesday after 1.8 crore equity shares changed hands in a large trade.

The deal aggregating to 1.85 percent equity of the company amounted to Rs 807.1 crore. The shares were traded at an average price of Rs 451.5 per piece. Dealing rooms indicate that a leading foreign investor is likely to be the seller in this transaction.

In the past year, Max Healthcare’s stock has advanced more than 27 percent. At the current market price, Max Healthcare’s stock is 58 percent higher than its last 52-week low of Rs 306 per share, reached on August 25, 2022.

On Monday, Motilal Oswal initiated a ‘Buy’ rating on Max Healthcare’s stock, setting a price target of Rs 530 per share, which is a 9.6 percent upside from the stock’s current market price.

The brokerage firm believes the company has a proven track record of improving its hospital business’ profitability and sees it as a leading competitor to its peers across operational parameters.

It also expects the healthcare company to deliver a 16 percent compounded annual growth rate (CAGR) in terms of revenue, and 17 percent in terms of EBITDA over the financial years 2023-25.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Motilal Oswal recommends buying Max Healthcare over enhanced growth prospects in next 3-5 years

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Max Healthcare Institute Ltd. jumped nearly 5 percent in intraday trade on Monday after brokerage firm Motilal Oswal initiated coverage on the stock with a ‘BUY’ rating. Motilal Oswal also gave a price target of Rs 530 on the Max Healthcare stock, implying an upside of 23 percent from its previous close of Rs 430.60 on Thursday.

In its research report dated April 6, the brokerage firm said that Max Healthcare has a proven track record of improving the profitability of its hospitals and is leading its peers across operational parameters.

The report added that Max Healthcare has a substantial land bank in existing locations, which enhances its growth prospects over the next 3-5 years.

Motilal Oswal said it expected Max Healthcare to deliver a compounded annual growth rate (CAGR) of 16 percent in terms of revenue and 17 percent in terms of EBITDA over the fiscal years 2023-25.

The growth should primarily be led by factors such as a fall in the share of institutional patients, a higher number of international patients driven by a strong brand recall, and the company’s ongoing cost management measures.

 “The roadmap of more than doubling its operating beds over the next five years remains on track largely due to strong internal accruals. The inorganic initiative would also be another potential driver of earnings growth, given its strong turnaround capability,” Motilal Oswal said in its report.

The brokerage firm also mentioned that Max Healthcare’s pathology business MaxLab should see a 20 percent sales CAGR to Rs 160 crore over the fiscal years 2023-25 with geographical expansion and better traction in existing centres.

The company’s other segment Max@Home, a platform that provides health and wellness services at home, is also expected to see 16 percent sales CAGR to Rs 180 crore over the fiscal years 2023-25 considering its comprehensive service offerings.

Max Healthcare Institute is a leading healthcare service provider, with major concentration in North India. The network comprises 17 hospitals owned and managed by the company.

Shares of Max Healthcare are trading 3 percent higher at Rs 443.25.

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Max Healthcare expects occupancy to fall but revenue from each patient likely to rise

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Hospital chain Max Healthcare expects the second half of the fiscal to be marginally better than the first half in terms of revenue generated from each patient as the third and fourth quarters usually witnesses more surgeries, the firm’s Chairman and Managing Director Abhay Soi said on Wednesday.

“As far as occupancies are concerned, you are not going to have a 78 percent kind of occupancy when you come off the season in quarter three. But there will be higher ARPOBs (average revenue per occupied bed) compensating for it because there will be a better surgical mix of both surgical patients, which typically tend to pay you a higher ARPOB,” he told CNBC-TV18 in an interview.

Soi pointed out that typically the second quarter is the viral season when more patients tend to get themselves admitted to hospitals due to dengue. The healthcare company, therefore, benefitted from the high viral load leading to higher occupancies. “Both of these factors gave the firm some operating leverage, and therefore, it witnessed another quarter of all-time high revenue and EBITDA, he added.

Max Healthcare MD’s remarks come a day after the firm reported its financial results for the July to September period during which its profit after tax more than doubled to Rs 511 crore while the consolidated net profit jumped over three-fold to Rs 457.35 crore as against the year-ago period.

This includes a one-time gain on account of the reversal of deferred tax liability (net of capital gains tax) relating to intangible assets transferred to Max Healthcare Institute Limited pursuant to the voluntary liquidation of Saket City Hospital Limited and distribution of its business undertaking in August 2022, the firm said in an exchange filing.

The healthcare provider’s net revenue stood at Rs 1,482 crore during the July-September period, up from Rs 1,353 crore. Its revenue from operations stood at Rs 1,137.12 crore during the July-September period,019.26 crore, a regulatory filing showed.

In the September ended quarter, Max Healthcare’s bed occupancy was at 78 percent, of which a percentage of total occupied beds were used for COVID-19 patients. The ARPOB improved to Rs 66,000 compared to Rs 59,000 in the corresponding quarter of the last fiscal and Rs 66,000 in April to June quarter of FY23.

Soi attributed the sequentially flat ARPOB to medical management during the period and relatively lesser surgical management, which implies little stress on ARPOB for the quarter.

“The growth in the second quarter FY23 revenue and operating EBITDA were driven by higher occupancies, improved payor mix, and increased ARR in OPD,” the company said.

Max Healthcare’s international patient revenue grew by 16 percent quarter-on-quarter and reflected 110 percent of the pre-COVID average. “This is whilst Afghanistan, which is one of our key markets that used to be 12 percent of our total business is really down to a trickle, right now is down to zero because the Indian Embassy is not really issuing many visas,” Soi said. According to him, once resumes, the firm will see a massive flow from there.

“Occupancies will move up marginally from a base rate, but you will definitely see a significant move up as far as our ARPOB is concerned,” he added.

Watch the accompanying video for more

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Max Healthcare net profit rises three-fold to Rs 457 crore in Q2

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Max Healthcare on Tuesday reported an over three-fold rise in its consolidated net profit for the second quarter to Rs 457.3 crore, as against Rs 144.6 crore in the year-ago period.

The healthcare provider’s revenue from operations stood at Rs 1,137.1 crore during the July-September period, up from Rs 1,019.3 crore, a regulatory filing showed.

Its total expenses also increased to Rs 897.7 crore during the quarter under review, as against Rs 860.1 crore in the year-ago period.

Abhay Soi, Chairman and MD, Max Healthcare Institute Ltd, said: “The performance for Q2 FY23 is as per our expectations and reflects the focus on execution across the organisation in line with our articulated strategy. Healthcare sector in general and Max Healthcare in particular are making significant investments over the next 4-5 years leading to huge employment opportunities and a multiplier effect on GDP.”

He added that the impetus provided by the government through its focus on healthcare and ‘heal in India’ initiatives will provide a watershed moment for the industry.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Max Healthcare plans board revamp after KKR sells entire stake

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Private equity major KKR has sold its entire 27 percent stake in Max Health
and raised Rs 9,290 crore in the process. A total of 26 crore shares changed hands at Rs 355 apiece in the deal.

Abhay Soi, chairman and managing director of Max Healthcare, told CNBC-TV18 that GIC and Capital Group were among the new investors.

“We are happy to have attracted very good investors in the form of the government of Singapore through GIC, Capital Group, which is a $3 trillion group and, the best of marquee investors through the sell-down,” he said.

The stake sale, via a block deal, was executed by Kalyan Investments, which is a KKR-affiliated company, and had invested in the healthcare company.

KKR had two board seats, and they will be stepping down as part of a shareholders agreement. “We will be nominating other non-independent non-executive members as whole-time directors,” Soi said.

The stock opened positively on Tuesday on the back of this news and, at the time of publishing, was up close to 2.5 percent.

KKR has sold its stake at a discount of 3.3 percent to the current market price.

HSBC has maintained a “buy” call on the stock but cut its target price to Rs 425 from Rs 435 per share. The brokerage remained positive on core hospitals business and said that Max should have sustained growth in its non-COVID portfolio.

According to Soi, the company was happy to have multiple partners rather than one partner through private equity. “It’s an expensive company… So, every percent cost me about Rs 360 crore, but over a period of time, you will see us climbing up on stake,” he told CNBC-TV18.

A week back, Max Healthcare reported its first quarter performance, where its consolidated net profit increased by 12 percent to Rs 229 crore for the June quarter, driven by annual price revision and normalisation of patient footfalls.

The net revenue during the period under review rose to Rs 1,393 crore as compared with Rs 1,322 crore in the April-June quarter of the last financial year.

For a ball-by-ball commentary on how the markets are faring today (Aug 16, 2022), click here

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Max Healthcare says international patient volumes are back to pre-COVID levels

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The international patient volumes are back to pre-COVID levels for Max Healthcare, said Chairman and MD Abhay Soi on Thursday, adding that the numbers are expected to grow further with Afghanistan, one of its main markets, coming back to normalcy.

“The international patient levels are back to pre-COVID levels. This is in spite of the fact that the main market for us, which is Afghanistan, hasn’t come back to pre-COVID levels at present because a travel from that country has been limited and restricted because of geopolitical reasons… As soon as we see Afghanistan return to normalcy, you’ll see this number going up even further,” said Soi in an interview with CNBC-TV18.

Max Healthcare on Wednesday reported its first-quarter earnings with the consolidated net profit rising 12 percent year-on-year to Rs 229 crore from Rs 205 crore owing to normalisation of patient footfalls post COVID-19 and the annual revision of rates. Margins are steady around 26 percent.

Among the key highlights is the occupancy level, which has grown to 74 percent from 68 percent quarter-on-quarter, though down from 81 percent last year. Average revenue per occupied bed stands at Rs 66,000, up 28 percent YoY and 6 percent QoQ.

“Q1 FY23 performance reflects normalisation of revenues and operating EBITDA post Omicron wave in the previous quarter,” Soi said in a statement.

On Prime Minister Narendra Modi’s ‘Heal in India’ initiative, Max Healthcare said that the government is taking efforts to position India as a destination for global medical tourism.

“If we are getting this sort of support in creating the awareness and putting India as a preferred destination for medical tourism, then the sky is the limit,” said Soi.

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PM Modi is likely to announce the ‘Heal in India’ campaign on August 15, 75th Independence Day. Under this initiative, the government aims to take the medical tourism market to $15 billion over the next four years from $6 billion currently.

In June, the government chalked out a plan to augment the medical infrastructure in 17 cities that witness an inflow of many overseas patients for treatment and wellness therapies in order to boost medical travel as part of its ‘Heal in India’ initiative.

The health ministry is also working on easing medical visa norms and other requirements for patients as well as their companions from 44 countries that are identified based on the number of patients visiting India.

Max Healthcare stock closed 0.39 percent lower at Rs 370 per share on BSE.

For the entire interview, watch the accompanying video

(With PTI inputs)

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Covid-19 related hospitalisation almost gone; see medical tourism picking up: Max Healthcare

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As Covid cases see a decline in the country and international flights return to normalcy, Abhay Soi, Chairman & MD, Max Healthcare, expects medical tourism to pick up soon. Soi said that medical tourism is back to around 3/4^th of pre-Covid levels.

In an interview to CNBC-TV18, he said, “Business seems to be back. We see a lot of international medical tourism and India’s medical tourism should be back in the next couple of months.”

Soi said that Covid-19 is pretty much gone from a hospitalisation standpoint. He explained that they have a shortage of beds and are waiting for new capacities to come on stream. Going ahead, he expects average revenue per occupied bed and EBITDA per bed to be healthy. He shared that the pricing impact on the topline is around 1.5-2 percent.

Also Read: Max Healthcare falls over 5% after KKR affiliate sells 10% stake via block deals

He said, “We have a massive shortage of beds at hospitals now because we are operating in about 75 percent of occupancy and on a sustainable basis can do about 77-78 percent and international business, which is post lifting of international flight bans expected to come back to 100 percent or more in the next couple of months.”

Private equity major KKR’s affiliate Kayak Investment has sold 10 percent of its stake in Max Healthcare. The stake sale consisted of around 9.6 crore shares at Rs 340 a piece. Prior to the sale, KKR held around 37.5 percent in Max Healthcare.

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When asked about the stake sale, Soi said that he didn’t know the reason behind the same.  He further mentioned that KKR won’t be able to sell any of its stake in the next 90 days.

Watch the accompanying video for the entire interview

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow