Home / Markets / Stock Markets /  Edelweiss sees 30% upside in this healthcare stock. Should you buy?

Max Healthcare shares have been under sell-off heat for near 6 months. After climbing to 52-week high in December 2021, Max Healthcare share price has remained a bears' favourite 'sell on rise' stock. In YTD time, this healthcare stock has shed near 15 per cent. However, in last one week, this healthcare stock has shown some upside swing that has attracted attention of Dalal Street observers. 

According to Edelweiss Wealth, Max Healthcare share price may go up to 470 apiece levels in long run. Max Healthcare share price today is around 363 per share that means the brokerage is expecting around 30 per cent upside in the scrip.

On fundamentals supporting Max Healthcare shares, Edelweiss Wealth research report says, "The company said in a meeting that it will continue to focus on growth through planned beds expansion, improving AROPB and enhancing occupancy. In key takeaways, the management is confident of (a) strong growth in the coming quarters, (b) maintaining a healthy margin, (c) increase in foreign patients and (d) improvement in the payer mix. MHI has successfully integrated acquisitions in the past, with one of its key growth strategies being expansion through the inorganic route. We believe MHI deserves superior valuations as it meets all our key investment considerations – it has a superior case mix vs. that of peers, brand power, quality of care, cost efficiencies and presence in premium markets (Mumbai and Delhi NCR)."

Expecting improvement in EBIDTA, Edelweiss report added,, "The company doubled its operating EBITDA in FY22, with EBITDA per bed (excluding the revenue from COVID-19 vaccination and related antibody tests and Max Lab operations) increased to INR53.9lacs (+78% YoY) in FY22. EBITDA per bed is expected to improve further with improvement in clinical mix, rise in international patients and growth in occupancy."

On its suggestion to positional investors in regard to Max Healthcare shares, Edelweiss Wealth report said, " We maintain our positive outlook on the company, keeping in mind its asset-light strong expansion plans with superior RoCE and sector-leading ARPOB. We maintain our BUY rating with a target price of INR470 per share (DCF-based)."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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