Company Update : Max Healthcare Ltd By Motilal Oswal Financial Services Ltd
Operationally better than estimates
* In 3QFY25, Max network revenue (including trust business) grew 34.9% YoY to INR22.7b (our est. INR21.2b).
* EBITDA margin contracted 45bp YoY to 27.2% (our est. 26.0%) owing to higher other expenses (+390bp YoY as % of revenue), offset by lower employee expenses (-470bp YoY as % of revenue)
* EBITDA grew 32.7% YoY to INR6.2b (our est. INR 5.5b) primarily driven by higher revenue.
* Adjusted PAT grew 16.5% YoY to INR4b (our est. INR3.7b), led by other income, offset by higher interest and depreciation expenses.
* EBITDA per bed (annualized) stood at INR7.3m (-4% YoY and -2% QoQ).
* Lucknow hospital revenue/EBITDA margin came in at INR930m/33%. Nagpur hospital revenue/EBITDA margin came in at INR540m/20% for the quarter.
* Max Dwarka, a 303-bed greenfield hospital launched in Jul’24, reported EBITDA breakeven in Dec’24.
* For 9MFY25, revenue/EBITDA/PAT grew 26%/22%/8% to INR63.2b/INR16.8/ INR10.8b.
* In 3QFY25, revenue/EBITDA/PAT beat Bloomberg consensus estimates by 4%/8%/10%.
Other highlights
* For hospitals business, ARPOB stood at INR75.9k in 3QFY25 (+-1% YoY).
* Occupancy came in at 75% in 3QFY25 (vs. 73% in 3QFY24) and 81% in 2QFY25.
* Payor mix changed as…
* Cash segment revenue share increased 7bp YoY to 33.4%.
* Institutional revenue share increased 160bp to 19.9% YoY.
* International revenue share declined 40bp YoY to ~9.0% of revenue.
* TPA and Corporate segment revenue share declined 130bp YoY to 37.7%.
* Max Lab gross revenue was INR420m (+24% YoY/-9% QoQ).
* Max@Home gross revenue was INR550m (+25% YoY, +3.8% QoQ).
* The board has approved an agreement to lease a “built-to-suit” 500-bed hospital in Thane, Maharashtra.
* It has approved the expansion of bed capacity in its upcoming “built-to-suit” hospital in Zirakpur (Mohali) to 400 beds from previous planned capacity of 250 beds.
* Net debt stood at INR16b at the end of 3QFY25 vs. net cash of INR3b in 2QFY25.
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