Max Healthcare share rises 3% as UBS upgrades to 'Buy', lifts target price

UBS on Max Healthcare: Private hospital chain Max Healthcare shares were in demand on Tuesday, February 18, 2025, as the scrip rose up to 2.92 per cent to hit an intraday high of Rs 1,045 per share. 

 

The uptick in the Max Healthcare share price came after Zurich-based brokerage firm UBS upgraded the stock to ‘Buy’ from ‘Neutral’. The brokerage also raised the target price to Rs 1,200, from Rs 600 earlier. The new target price reflects an upside of 18.18 per cent from the previous close (February 17) of Rs 1,015.35 per share. 

 

According to reports, UBS said that Max Healthcare is well-positioned for earnings growth, with solid foundations in place. Additionally, the company plans to double its bed capacity within the next three years, which could further boost its prospects.

 

Analysts at UBS also highlighted that Max Healthcare's asset-light model positions it as a leader among its peers in the sector.

 

Q3 results

 

Max Healthcare’s consolidated net profit dropped 17.4 per cent Y-o-Y to Rs 238.80 crore in Q3FY25, from Rs 289.3 crore in the same quarter last year (Q3FY25).

 

The hospital chain operator’s revenue from operations climbed 39.9 per cent Y-o-Y to Rs 1,868.3 crore in Q3FY25, from Rs 1,334.97 crore in Q3FY24.

 

In Q-o-Q terms, the company’s net profit dropped 15.2 per cent, while revenue soared 9.4 per cent from Rs 281.8 crore and Rs 1,707.5 crore in Q2FY25, respectively. READ MORE

 

Brokerage firm Motilal Oswal, while maintaining its ‘Buy’ rating, said that Max Healthcare delivered a better-than-expected performance for the quarter. Despite Q3 typically being a softer period due to the festival season, the Ebitda from existing hospitals remained stable Q-o-Q, driven by steady demand and improved operational efficiency. Additionally, Max Healthcare has shown consistent progress with its newer units.

 

Thus, Motilal Oswal has raised its earnings estimates for FY25, FY26, and FY27 by 3 per cent, 5 per cent, and 3 per cent, respectively, factoring in faster scaling of acquired hospitals, ongoing improvement in the case mix across existing hospitals, and the addition of beds in newer hospitals. 

 

“We value Max Healthcare on an SoTP basis (premised on 35x 12M forward EV/Ebitda, 30x 12M forward EV/Ebitda for Maxlab, and 10x EV/sales for Max@home) to arrive at our target price of Rs 1,300,” analysts at Motilal Oswal said, in a note.

 

Additionally, the analysts at Motilal Oswal remain optimistic about Max Healthcare due to its superior execution in operational centres and its robust growth plan, particularly through bed additions. The company is set to achieve maximum expansion via brownfield projects, which should enable a quicker Ebitda break-even. 

 

Max Healthcare is among India’s leading healthcare providers, operating 22 healthcare facilities with over 5,000 beds across multiple regions, including NCR Delhi, Haryana, Punjab, Uttarakhand, Maharashtra, and Uttar Pradesh. 

 

The organisation offers a wide range of services with over 30 specialties and more than 5,000 clinicians. Approximately 85 per cent of its bed capacity is located in Metro and Tier 1 cities. 

 

In addition to its hospitals, Max Healthcare also runs homecare and pathology services under the brands Max@Home and Max Labs. 

 

Max@Home provides health and wellness services at home, while Max Labs offers pathology services outside its hospital network.

 

At 10:57 AM, Max Healthcare share was trading 1.65 per cent higher at Rs 1,032.15 per share. In comparison, BSE Sensex was trading 0.37 per cent lower at 75,713 levels.