Earnings Outlook
Lucknow, Nagpur units to boost Max Health Jul-Sept net
This story was originally published at 17:44 IST on 4 November 2024
Register to read our real-time news.Informist, Monday, Nov. 4, 2024
By Sweta Roy
MUMBAI – Max Healthcare Institute Ltd.'s revenue for the September quarter will likely be driven by a steady growth in the company's existing network and ramp-up of the Lucknow and Nagpur facilities, analysts said. While these two units are expected to boost Max Healthcare's sales and margins, the newly operationalised unit at Dwarka in Delhi is expected to drag down overall margin during Jul-Sept.
The company’s net profit is expected to rise 31% on year to INR 3.64 billion during the September quarter and revenue is seen rising 53% on year to INR 20.84 billion, according to an average of estimates from five brokerages. Sequentially, the company’s net profit is seen rising 54% and revenue is seen growing 35% in the latest quarter.
The company will detail Jul-Sept earnings on Tuesday.
Max Healthcare will likely post a healthy performance for the September quarter due to higher occupancies on a sequential basis, Kotak Institutional Equities said. Max Healthcare's network hospital segment is expected to grow 18% on year in the latest quarter, Kotak said. Both Kotak and HDFC Securities expect the Max Lab business to post strong growth during the quarter. Revenue from the Max Lab business is expected to grow 22% on year and the Max@Home business is expected to grow 20% on year in Jul-Sept, Kotak said.
The company is expected to post a 16% on-year growth in operational beds, Centrum Broking said. While the company is likely to report flat-on-year occupancy in the latest quarter at 77%, its average rate per occupied bed is expected to grow 1.3% on year, the brokerage said. The company's average revenue per occupied bed is seen at INR 75,558, the brokerage said.
The company is likely to report earnings before interest, tax, depreciation, and amortisation of INR 5.49 billion for the latest quarter, according to the average of estimates from four brokerage firms. The company will likely post lower margins due to integration costs, HDFC Securities said. The integration of lower-margin facilities and the operating losses from the recently launched Dwarka hospital are expected to slightly drag down the company's margins, the brokerage said.
Although the 300-bed Dwarka unit is likely to dilute the company's overall performance for the latest quarter, the ramp-up in the company's facilities at Nagpur and Lucknow will drive the 10% expected growth in the company's base business and a 14% expected growth in its EBITDA for the September quarter, Prabhudas Lilladher said.
Investors will monitor the performance of the Dwarka, Lucknow, and Nagpur hospitals, details related to the acquisition of Jaypee Healthcare, and debt repayment plans related to the acquisition.
On Monday, shares of the company closed at INR 1,036.60 on the National Stock Exchange, up 2.9%.
Following are the Jul-Sept earnings estimates for Max Healthcare based on reports compiled by Informist from five brokerages:
Brokerage Firm | Net Sales | Net Profit | EBITDA |
| --------------------(In INR Million)---------------------- | |||
Anand Rathi Share and Stock Brokers Ltd | 20,603.00 | 3,802.00 |
|
Centrum Broking Ltd | 21,463.00 | 3,561.00 | 5,580.00 |
HDFC Securities Ltd | 21,388.00 | 3,671.00 | 5,492.00 |
Kotak Institutional Equities | 20,235.00 | 3,473.00 | 5,247.00 |
Prabhudas Lilladher Pvt Ltd | 20,531.00 | 3,680.00 | 5,650.00 |
Average | 20,844.00 | 3,637.40 | 5,492.25 |
End
Edited by Saji George Titus
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