IDEA2WIN - Buy: Max Healthcare

Buy - MAXHEALTH

CMP (NSE) 14:20, 28 Jul

275.10 -1.05-0.38%

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Sector

Pharma/Healthcare

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Reco. Price

240

Period

12-Months

Target Price

297

upside

%

Stop Loss

0

Last updated on

10 Jun, 2021

Max Healthcare Institute Limited ("Max Healthcare") is one of India’s largest healthcare organizations. The company operates 16 healthcare facilities (3,400 beds) across the NCR Delhi, Haryana, Punjab, Uttarakhand and Maharashtra. Almost 85% of their bed capacity is in Metro/Tier 1 cities. Apart from hospitals, Max Healthcare also operates a homecare business and pathology business under brand names Max@Home and Max Labs respectively. Max@Home offers health and wellness services at home while Max Lab provides Pathology Services outside their hospital network.

Investment Rationale

Higher average revenue per operating bed (ARPOB) as compared to peers

Max Healthcare is focused on large metros namely Mumbai and Delhi. Large metros have always been attractive for healthcare services given the high density of population and a huge demand-supply gap. This is complemented with the inherent demographic advantages such as high per capita income, high insurance penetration, propensity to pay for high-end quaternary care facilities and availability of senior clinical talent. This metro-centric presence of Max hospitals with high proportion (~85%) of the total beds located in metro cities of Delhi NCR and Mumbai, positions the company for industry leading ARPOBs.

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