Q4 Results Review: Max Healthcare share price has risen around 44% in last one year.
The ongoing expansions and acquisitions driving earnings outlook is the key driver for the Max Healthcare share price. Max Healthcare added 750 beds to its capacities in Q4 through acquisitions.
However, Max Healthcare share price has been on a down trend in last two trading sessions post results and is down more than 5%. Notably at close to ₹790 on the NSE, the Max Healthcare share price is down more than 10% from 52-week highs seen in February.
Analysts remain positive on growth being fueled by expansions. Analysts at Jefferies India Private Ltd have maintained Buy ratings on Max Healthcare post Q4. Their Q4 review report said that after In-line 4Q, there is bullish outlook for FY26. They have target price of ₹940 for Max Healthcare share price, which indicates around 17% upside
Analysts at Prabhudas Lilladher also said that the results were in line and growth is on track. Their target price stands at ₹925.
Analysts at Kotak Institutional Equities though also see strong ebitda growth to be fueled by brownfield expansions, nevertheless say that the same is factored in the share prices
Abhay Soi, Chairman and Managing Director, Max Healthcare Institute post Q4 Results said that “We have consummated two long drawn inorganic deals during the quarter. These transactions add significant capacity going forth and allow for additional brownfield opportunities in the fast growing markets"
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Moving forward the growth is likely to be driven by acquired capacities and Brownfield expansions, The 300 bed capacity will be added in early June. There is going to be 100 bed expansions in Lucknow by December'2024, and there after plenty of capex lined up to fuel growth including expansions at Nanavati Max Hospital ,200 beds to added in Mohali, 300 beds in Saket, New Delhi. All these brownfield expansions will fuel explosive growth over next few years said Soi. The under penetration in the healthcare market is giving immense growth opportunities as per Soi.
Max Healthcare consummated transactions for 200 bedded Alexis Hospital, Nagpur and 550 bedded Sahara Hospital, Lucknow, and the Q4 results of these hospitals have been consolidated effective Feb 9, 2024 and March 7, 2024 respectively.
Analysts at Jefferies India Pvt Ltd that management sounded bullish for FY26, as they expect significant brownfield capacity to come online. In Lucknow, the company hopes eventually to build a cluster of hospitals like that in Delhi. At the acquired Sahara hospital, Max will add 140 new beds by 2QFY26, 50 beds by internal reconfiguration in FY26, new tower of 350 beds by 1QFY27, and will refurbish current 250 beds by December 2024 , they added.
Analysts at Kotak Institutional Equities said that with a planned 70% plus bed addition over FY2024-27, Max is amid a hectic expansion plan. Nevertheless, given 75% of the new beds to be added over FY2024-27 estimated are either brownfield or near to Max’s existing hospitals, Kotak expects Max to deliver a healthy Ebitda CAGR (compound annual growth rate) of 23% over FY2024-27. The Ebitda growth nevertheless is fully factored in the stock price currently as per Kotak analysts.
The completed acquisitions helped Max Healthcare gross revenue at ₹1,890 Crore for the March'2024 quarter marking a growth of 15% year-on-year and 6% sequentially. These included ₹42 Crore from two acquired hospitals at Lucknow and Nagpur and hence on a like-to-like basis, the company highlighted that its gross revenue grew by 13%
Earnings before interest, tax, depreciation and amortisation (Ebitda) per bed on a like-to-like basis improved by +12% YoY to ₹78.5 lakhs in Q4 FY24, from ₹70.3 lakhs in Q4 FY23 and ₹75.6 lakhs in Q3 FY24
Net profit stood at ₹311 Crore in Q4 FY24 versus ₹320 crore in Q4 FY23 and ₹338 crore in Q3 FY24. The higher taxes weighed on net profit despite good operating performance
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