BUY - MAX HEALTHCARE INSTITUTE
CMP - Rs. 471
Target - Rs. 710
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Technicals -
1) Bullish Symmetrical Triangle BO
2) Multiple Resistance BO
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Fundamentals -
1) Financial Analysis:
Looking at the financial performance of Max Healthcare, we can see that the company has shown consistent growth over the years. The revenue of the company has increased from INR 2,880.56 crore in FY2019 to INR 3,247.76 crore in FY2021, which is a CAGR of 12.6%. The company has also been able to maintain its gross margins at around 27-28% over the past three years. However, the company has been reporting losses for the past three years due to high finance costs and depreciation expenses.
The company's debt-to-equity ratio stands at 1.5, which is higher than the industry average of 0.6. The high debt levels can be attributed to the company's expansion plans and investments in new hospitals and diagnostic centers. However, the company has been able to service its debt obligations without any major issues.
2) Valuation:
Max Healthcare's current market capitalization is around INR 7,000 crore, and the stock is trading at a P/E ratio of around 108x. This valuation seems high compared to the industry average of 28x. However, the high P/E ratio can be justified by the company's growth prospects and the potential for higher profitability in the future.
CMP - Rs. 471
Target - Rs. 710
.
.
Technicals -
1) Bullish Symmetrical Triangle BO
2) Multiple Resistance BO
.
.
Fundamentals -
1) Financial Analysis:
Looking at the financial performance of Max Healthcare, we can see that the company has shown consistent growth over the years. The revenue of the company has increased from INR 2,880.56 crore in FY2019 to INR 3,247.76 crore in FY2021, which is a CAGR of 12.6%. The company has also been able to maintain its gross margins at around 27-28% over the past three years. However, the company has been reporting losses for the past three years due to high finance costs and depreciation expenses.
The company's debt-to-equity ratio stands at 1.5, which is higher than the industry average of 0.6. The high debt levels can be attributed to the company's expansion plans and investments in new hospitals and diagnostic centers. However, the company has been able to service its debt obligations without any major issues.
2) Valuation:
Max Healthcare's current market capitalization is around INR 7,000 crore, and the stock is trading at a P/E ratio of around 108x. This valuation seems high compared to the industry average of 28x. However, the high P/E ratio can be justified by the company's growth prospects and the potential for higher profitability in the future.
