MAXINDNSEQ3FY23February 8, 2023

Max India Limited

5,421words
87turns
12analyst exchanges
4executives
Management on call
Rajit Mehta
MANAGING DIRECTOR – MAX INDIA LIMITED
Sandeep Pathak
CHIEF FINANCIAL OFFICER – MAX INDIA LIMITED
Ajay Agrawal
CHIEF FINANCIAL OFFICER –
Ishan Bummi
CHIEF OPERATING OFFICER –
Key numbers — 40 extracted
6%
th story, the story of improving financial results continues for us. Our revenues have gone up by 6% to INR 153 crores in the 9-month period and 8% to INR 46 crores in Q3 FY '23 compared to same qua
INR 153 crore
ry, the story of improving financial results continues for us. Our revenues have gone up by 6% to INR 153 crores in the 9-month period and 8% to INR 46 crores in Q3 FY '23 compared to same quarter last year. O
8%
s continues for us. Our revenues have gone up by 6% to INR 153 crores in the 9-month period and 8% to INR 46 crores in Q3 FY '23 compared to same quarter last year. Our consolidated
INR 46 crore
ntinues for us. Our revenues have gone up by 6% to INR 153 crores in the 9-month period and 8% to INR 46 crores in Q3 FY '23 compared to same quarter last year. Our consolidated EBITDA has gon
7x
Q3 FY '23 compared to same quarter last year. Our consolidated EBITDA has gone up 7x to INR 6.5 crores in 9 months FY '23, and treasury and other monetizable assets stood at a health
INR 6.5 crore
'23 compared to same quarter last year. Our consolidated EBITDA has gone up 7x to INR 6.5 crores in 9 months FY '23, and treasury and other monetizable assets stood at a healthy number of INR 4
INR 450 crore
crores in 9 months FY '23, and treasury and other monetizable assets stood at a healthy number of INR 450 crores as of December '22. On the Residences side, for Dehradun, we only have 8 units left and achieved
27%
ember '22. On the Residences side, for Dehradun, we only have 8 units left and achieved a rise of 27% collection. So far, they have collected INR 615 crores inception till date. On the Noida front,
INR 615 crore
dun, we only have 8 units left and achieved a rise of 27% collection. So far, they have collected INR 615 crores inception till date. On the Noida front, out of 340 units, we're only left with 6 units to sell
INR 212 crore
da front, out of 340 units, we're only left with 6 units to sell now and achieved a collection of INR 212 crores, which is a 3.2x growth over last year. In terms of construction, we are on target. In terms of
3.2x
we're only left with 6 units to sell now and achieved a collection of INR 212 crores, which is a 3.2x growth over last year. In terms of construction, we are on target. In terms of timing, we've alre
rs,
ction, we are on target. In terms of timing, we've already constructed 19 floors of all the 3 towers, R1, R2, R3, respectively, as on December '22. So literally, what this means we are constructing on
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Guidance — 13 items
Rajit Mehta
opening
“In terms of construction, we are on target.”
Rajit Mehta
opening
“We have achieved our monthly sales collection target of INR 8 crores per month in Q3 FY '23.”
Rajit Mehta
opening
“The project continues to be PBT positive, debt-free and cash positive.”
Rajit Mehta
opening
“We aspire in the future, and God willing, everything going well to have 8 to 10 communities for residences for seniors in the next 5 years and about 2,000 beds of Care Home, Memory Care Home, across North, West and South clusters.”
Rajit Mehta
qa
“Hopefully, we will be able to continue this trajectory.”
Rajit Mehta
qa
“And that's our endeavor to be able to reach that target.”
Rajit Mehta
qa
“So that's why I said we are in advanced discussions for the Gurgaon project and also pursuing Bangalore and Pune opportunities.”
Rajit Mehta
qa
“So I have earlier stated that we want to end up with 8 to 10 communities, 2,000 beds of Memory Care, Care Homes, Care at Home and MedCare business, and aim for all our revenues ranging for INR 500 crores to INR 600 crores depending on how we are able to do.”
Rajit Mehta
qa
“But currently, we are on track to that aspiration.”
Rajit Mehta
qa
“Some facilities will be near the hospitals, which have meant for transition or short stay.”
Risks & concerns — 2 flagged
Our hearts and prayers have been with them in their difficult times, and we are doing everything possible to make sure we cooperate fully with the investigating authorities.
— Rajit Mehta
As I said, we've already sold about 334 of the 340 units as of December '22 despite the 20% hike we took in the prices so that we're able to mitigate some of the impact of the rising material costs.
— Rajit Mehta
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Q&A — 12 exchanges
Q
So I would like to ask, what is your strategy in the Care at Home segment? Like what are the growth levers for that vertical?
Rajit Mehta
So in Care at Home, as you know, it's well recognized particularly in India, and more and more services are shifting to homes. So we offer 16 products and service lines in the Care at Home vertical. Our focus obviously is on services that offer high margins like critical care, physiotherapy and diagnostics. So our intention is to be able to progress this vertical in conjunction to other business verticals that we have. And soon we'll be entering other geography in the next few months on the Care at Home side. Okay. Got it. And also sir, what is the top line growth that can be achieved over the
Q
Sir, I just wanted to check that we have guided for 225 rooms to be opened by the end of FY '23, so are we on track for that?
Rajit Mehta
That's our endeavor, so we are under discussion with several people right now. And that's our endeavor to be able to reach that target. So sir, mainly what is the bottleneck? Like -- because we've established a proof of concept, so what is it that is stopping us from scaling up given that we have adequate liquidity on our balance sheet? Just wanted to check like what is the bottleneck, how long does it take to turn around the property, close the negotiation .. Appropriate infrastructure up to our standard with expectation to be able to deliver what we want to deliver as quality of care to the
Q
My first question is that you mentioned that the overall untapped market for senior citizen is around $10 billion to $12 billion. And when you say that you have a very good brand name, what is holding up to ramp up the -- your operation to achieve a reasonably large market share of the untapped market? How long will it take to really be a significant player in this market?
Rajit Mehta
So as I've been saying in the earlier calls as well, unfortunately, 2 years of COVID took away some of the momentum we have wanted to achieve. But we are back on track, as you can see from the growth numbers. And therefore, in the next 4 to 5 years, we want to really achieve what we are saying a dominant position. We have the money in the bank. We are currently making sure that we are putting the right team together. We already hired a lot of people, but there's no constraint apart from execution that we have to undertake. And also, while the demand is there, how far the demand converts to nee
Q
Two questions from my end. First one, sir, which are the different products in the MedCare segment launched on e-commerce website? And second, how is the traction for Antara-branded wheelchair, which was listed on Amazon?
Rajit Mehta
So currently, we have 5-6 SKUs of wheelchair available at Amazon, Flipkart and 1 mg. Since launch is about 2-3 months now, we have sold about 60 wheelchairs from both through offline and online channel. And the next products, 5 or 6 SKUs are in the offering, should be listed very soon. Sure, sir. And sir, the different products in the MedCare segment? So we have products on the respiratory side, mobility side. So things like commode chairs, shower chairs, oxygen concentrators, air mattresses, hospital beds, supports for knee, elbow, neck, et cetera as well as wheelchairs, walkers, those kind o
Q
There was notification recently about the subscription-based elder care facility will face 18% GST. So do you see any major impact, especially for Care at Home services?
Rajit Mehta
So no impact as far as we are concerned. Okay. And -- We don't offer subscription models. And -- can you elaborate the plan on the Pune, while we mentioned that, I think, the discussions are on with the builders. Can you elaborate further, like where are we on the Pune launch? Can't make forward-looking statements, but I'll turn over to Ajay. So basically, we are in a very advanced discussion both at Gurgaon and Bangalore. We are at the term sheet stage from negotiations final going on, but we have identified the land. And as suggested, we are also now going to work on Noida Phase 2, where we
Q
So I want to ask about the Care Home business model. So we see in Gurgaon that the contribution has turned positive. So where do we stand in terms of the scalability and their replicability, like if we opened another care home. So it is the same, or are we facing some sort of headwinds?
Rajit Mehta
So there could be variation. But if you look at the going-in assumption of the unit level model, we assume that we'll be able to break even in 2 years from opening. The steady state contribution in the 20s, and a revenue signature of about INR 3 crores to INR 5 crores, depending on pricing and where we open. And currently, we see that we'll be able to, of course, I'm talking about NCR which, compared to other geographies, the price points could be different. But at a unit level, we still would want to endeavor towards 2-year breakeven model. So some assumptions have gone better than what we ex
Q
Sir, I wanted to ask my first question is in the Care Home segment. How many beds will be added in FY '24?
Rajit Mehta
In FY '24, I don't think we want to make any forward-looking statements. But our endeavor is to look at about maybe 175 to 225 kind of beds, in that range. Additional beds over current. Okay. And secondly, so the Care Home strategy talks about exploring and accelerating quickly- scalable models. Can you elaborate a bit about this? Yes. The model is to take rented accommodation, which are appropriate in terms of quality of infrastructure and facilities. And we would prefer if you have 35 to 50 kind of beds possible, so that's the preference. Near hospitals, so the hospital should not be more th
Q
So if you can share some highlights on what is the potential loss due to the shutdown of GK Care Home?
Rajit Mehta
Very early to comment because there are other facilities available for us to push the occupancy. So we're trying our best through this, and to push in other verticals to make sure the impact is minimized. So it's too early to comment. Maybe in the next quarter earnings call, I'll be able to give a number around it. But it looks like, at this point of time, not much. So my second question is like when is the company launching Phase 2 at Noida and what will be the price per square feet? Currently, planning under preparation. We are waiting for clarification from the statutory authorities because
Q
Regarding that -- in every presentation you are mentioning about the Brookdale of US in the same business model. But how you will be going to differentiate from Brookdale's to our Max India business model? Because in Brookdale they haven’t given any shareholder value till now. So how are you going to differentiate from that one? That's my question.
Rajit Mehta
Sorry, could you repeat? I can't understand, sir. Group what? You were mentioning about the Brookdale business sector, which is a US business. US -- Brookdale Company, which work on the same business segment. Okay. So how we are going to differentiate from that business model? Because that Brookdale didn't get any shareholders value until now. It is listed for more than -- So it's a very different business, different geography, different contours because please remember in the West, this is all funded through insurance and there are other products available for financial help. So we have a dif
Q
So I have a couple of questions regarding the recent incident. So my first question is, what is the current status both legally and commercially on the property that caught fire? And also, any financial compensation is provided by Max India to those families?
Rajit Mehta
As I said, the matter is currently under investigation. We are fully cooperating with the authorities at this point of time. We are trying to mitigate the impact by using other facilities to push up the revenue on that side and other business verticals. So at this point of time, there's no other development. And my second question is the that this incident has damaged our reputation to some extent. So as a company, how are we dealing to negate this negative publicity? So at this point of time, we're doing our best to support the residents over there. In fact, all of them continue to avail of o
Q
So I have a question regarding the Care Homes. So is the company planning on launching any units in the South? Because we see that it's a secular trend of the population decrease happening in the South. The reproduction ratio going down. This is regarding Care Homes and not senior residents.
Rajit Mehta
As I said, we are planning to expand geography. And in the next few months, we'll be able to share with you once we are done of our foray into South and then West. So yes, we are planning.
Q
So thank you very much for all the questions and the engaged interaction we have. So just to summarize, once again, we are well on our track to meet our aspirations of high growth, improving profitability and margin across the four verticals. We have enough liquidity to push for our future growth, and the focus now is on scale up. We're aspiring to look at 8 to 10 communities and residences for seniors, 2,000 beds of Care Home, Memory Care Room and the verticals of MedCare and Care at Home as well. So once again, thank you very much for your support. Appreciate it. Thank you.
Management
Speaking time
Rajit Mehta
37
Moderator
14
Ulhas Paymaster
8
Anant Mundra
6
Ranodeep Sen
4
Shivakumara Swamy
4
Shakthi
3
Apurva Doshi
2
Anjana Shah
2
Kanika Kothari
2
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Opening remarks
Rajit Mehta
Thank you very much. Good evening, ladies and gentlemen. On behalf of Max India Limited, I extend a warm welcome to all of you for this Q3 and 9 months FY '23 earnings call. For the benefit of audiences who might be joining us for the first time, I have with me my colleague, Ajay Agrawal, CFO for Antara Senior Living and Head of Investor Relations, SGA Our Investor Relations Advisor. Also have members of the management team with me. Ishan Bummi, COO for Antara Assisted Care; Sandeep Pathak, CFO for Max India; and Ankit Kalra, Finance Head for Antara Assisted Care; and Nishant from the Investor Relations team. We uploaded our results presentation on the exchanges, and I hope everybody had the opportunity to go through the same. I'm going to begin the call on a somber note. As you know, in our wholly-owned subsidiary, Antara Assisted Care Services in the care home vertical, which is one the business that they handle. In one of the facilities in South Delhi, unfortunately, a fire incident
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