Any current/future capex/capital investment/strategic investment?

Ongoing expansions include 2,600 beds with 300 beds expected by FY24-end and approximately 819 beds in FY25 (Nanavati 329 beds, Mohali 190 beds, Gurgaon 300 beds). Max Shalimar Bagh brownfield expansion operational with 78% occupancy; brownfields have quick EBITDA breakeven (within quarter or two). Greenfield projects comprise 10% of expansion with breakeven expected within 12 months. Max Smart at Saket: 350 beds delayed but work to restart by Dec 2023. Max Vikrant at Saket and Patparganj expansions progressing with approvals underway. Strategic focus on fiscal discipline while deplo

Future growth expectations in sales/revenue/volumes?

Occupied bed days grew 3% YoY and 5% QoQ with average occupancy at 77%; inpatient discharges up 7% YoY. Network gross revenue increased 17% YoY, driven by ARPOB growth and higher occupied bed days. Revenue from international business grew 25% YoY and 11% QoQ; international revenue now ~9% of hospital revenue. Oncology specialty revenue growing faster (26%-28%) than overall business (17%), driven by higher disease burden and insurance penetration. Capacity to expand with 2,600 beds coming online over next 3-4 years, adding significant growth runway. Institutional business ARPOB up 28%

Future growth expectations in earnings/operating earnings/profits/EPS?

Expectation of continued strong revenue and EBITDA growth trajectory of around 20% per year over the next 3-5 years, supported by both organic expansion and inorganic opportunities. Network EBITDA grew 20% year-on-year in H1 FY24, reflecting operational efficiencies and improved payor mix. EBITDA per bed increased by 15% indicating improved profitability and operational leverage. Upcoming capacity expansion of ~2,600 beds over the next 3-4 years, mostly brownfield projects with quick breakeven typically within 1-2 quarters, will drive higher cash flows and earnings growth. The recent brownfiel

Current/ Expected Orderbook/ Pending Orders?

The company has a significant development pipeline with 2,600 new beds coming up in the next few years. Specific projects under progress include: - 329 beds at Nanavati: Excavation and raft work complete; ground level structure expected to be finished within the current quarter. - 300 beds at Sector 56, Gurgaon: Site excavation almost done; EPC contractor on board; project on schedule. - 190 beds at Mohali: D-wall completed; excavation underway; statutory approvals all received; project on time. - 350 beds at Max Smart, Saket: Delayed due to tree transplant permissions but work to comm

Max HealthcareQ2 FY24Healthcare Services

Max Healthcare Q2 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹941P/E: 65.9Market Cap: ₹98.7K CrSector: Healthcare Services

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 2

Occupied bed days grew 3% YoY and 5% QoQ with average occupancy at 77%; inpatient discharges up 7% YoY.
Network gross revenue increased 17% YoY, driven by ARPOB growth and higher occupied bed days.
Revenue from international business grew 25% YoY and 11% QoQ; international revenue now ~9% of hospital revenue.
Oncology specialty revenue growing faster (26%-28%) than overall business (17%), driven by higher disease burden and insurance penetration.
Capacity to expand with 2,600 beds coming online over next 3-4 years, adding significant growth runway.
Institutional business ARPOB up 28% YoY due to mix change rather than price hike.
Expect continued multi-decade growth opportunity due to under-penetration of quality healthcare in India.
EBITDA and cash flow expected to maintain robust growth trajectory with bed expansions and operational efficiencies.

Margin guidance

Category 3

Expectation of continued strong revenue and EBITDA growth trajectory of around 20% per year over the next 3-5 years, supported by both organic expansion and inorganic opportunities.
Network EBITDA grew 20% year-on-year in H1 FY24, reflecting operational efficiencies and improved payor mix.
EBITDA per bed increased by 15% indicating improved profitability and operational leverage.
Upcoming capacity expansion of ~2,600 beds over the next 3-4 years, mostly brownfield projects with quick breakeven typically within 1-2 quarters, will drive higher cash flows and earnings growth.
The recent brownfield expansion (Shalimar Bagh) reported EBITDA growth of 48% year-on-year, showcasing strong margin expansion.
Continued improvement expected from payor mix upgrades, specialty focus (oncology growth of 26-28%), and international patient revenue growth.
Management highlights disciplined capital allocation to sustain 20%+ earnings growth and long-term value creation.

See what Max Healthcare management said on margin guidance — free account, 30 seconds.

Fundraise plans

- The management did not mention any immediate plans for fundraising through debt or equity during the call. - They highlighted accumulating cash and being conscious of fiscal discipline in deployments. - Cash and leverage capacity are viewed as limited relative to large acquisition opportunities available at high valuations (15-16X EV/EBITDA). - They intend to deploy capital carefully, balancing expansion and acquisitions with fiscal prudence. - No explicit mention of upcoming debt or equity issuance was made; instead, focus is on organic growth, brownfield expansions, and select acquisitions. - The existing cash and balance sheet strength are considered adequate for near-term expansion, with plans to announce acquisitions soon. Overall, no current or immediate new fundraising through debt or equity was disclosed.

Order book

The company has a significant development pipeline with 2,600 new beds coming up in the next few years.
Specific projects under progress include:
- 329 beds at Nanavati: Excavation and raft work complete; ground level structure expected to be finished within the current quarter.
- 300 beds at Sector 56, Gurgaon: Site excavation almost done; EPC contractor on board; project on schedule.
- 190 beds at Mohali: D-wall completed; excavation underway; statutory approvals all received; project on time.
- 350 beds at Max Smart, Saket: Delayed due to tree transplant permissions but work to commence from December 2023.
- 300 beds at Vikrant, Saket: Environmental clearance received; municipal submissions in process.
- 250 beds at Patparganj: Drawings submitted; environmental clearance application submitted.
All projects are progressing on schedule without delays.
No new project acquisitions have been added in the last two years, but the company is actively looking at 20+ cities for expansion, including acquisitions and partnerships, with expected announcements soon.

See what Max Healthcare management said on order book — free account, 30 seconds.

Capex plans

Yes

Ongoing expansions include 2,600 beds with 300 beds expected by FY24-end and approximately 819 beds in FY25 (Nanavati 329 beds, Mohali 190 beds, Gurgaon 300 beds).
Max Shalimar Bagh brownfield expansion operational with 78% occupancy; brownfields have quick EBITDA breakeven (within quarter or two).
Greenfield projects comprise 10% of expansion with breakeven expected within 12 months.
Max Smart at Saket: 350 beds delayed but work to restart by Dec 2023.
Max Vikrant at Saket and Patparganj expansions progressing with approvals underway.
Strategic focus on fiscal discipline while deploying cash; acquisitions considered at right price but prefer built-to-suit, asset-light models over Greenfields.
Developer of Dwarka hospital (300 beds) applied for occupancy certificate, expected commissioning Q4 2023.
Planned capital deployment on both capacity expansion and inorganic opportunities; accumulation of cash with intent to invest soon.

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