MAXINDNSEJune 1, 2023

Max India Limited

6,758words
87turns
10analyst exchanges
6executives
Management on call
Rajit Mehta
MANAGING DIRECTOR – MAX INDIA LIMITED
Ajay Agrawal
CHIEF FINANCIAL OFFICER – ANTARA SENIOR LIVING, HEADS INVESTOR
Ishaan Khanna
CHIEF EXECUTIVE OFFICER – ANTARA ASSISTED CARE SERVICES
Sandeep Pathak
CHIEF FINANCIAL OFFICER
Ankit Kalra
CHIEF FINANCIAL OFFICER –
Nishant
INVESTOR RELATIONS – MAX INDIA LIMITED
Key numbers — 40 extracted
16%
alled Max Skill First, which we have closed. If you keep that aside, our revenues have gone up by 16% to INR 213 crores in FY '23, up by 17% to INR 60 crores in Q4 FY '23. Our consolidated EBITDA i
INR 213 crore
ax Skill First, which we have closed. If you keep that aside, our revenues have gone up by 16% to INR 213 crores in FY '23, up by 17% to INR 60 crores in Q4 FY '23. Our consolidated EBITDA improved to INR 12
17%
osed. If you keep that aside, our revenues have gone up by 16% to INR 213 crores in FY '23, up by 17% to INR 60 crores in Q4 FY '23. Our consolidated EBITDA improved to INR 12 crores in FY '23 from
INR 60 crore
f you keep that aside, our revenues have gone up by 16% to INR 213 crores in FY '23, up by 17% to INR 60 crores in Q4 FY '23. Our consolidated EBITDA improved to INR 12 crores in FY '23 from a loss of INR 1 c
INR 12 crore
crores in FY '23, up by 17% to INR 60 crores in Q4 FY '23. Our consolidated EBITDA improved to INR 12 crores in FY '23 from a loss of INR 1 crore in FY '22, which is quite heartening to note. And the Q4 FY
INR 1 crore
crores in Q4 FY '23. Our consolidated EBITDA improved to INR 12 crores in FY '23 from a loss of INR 1 crore in FY '22, which is quite heartening to note. And the Q4 FY '23 EBITDA further improved to INR
INR 5 crore
crore in FY '22, which is quite heartening to note. And the Q4 FY '23 EBITDA further improved to INR 5 crores from a loss of INR 2 crores in the corresponding previous quarter. Treasury and other monetizabl
INR 2 crore
uite heartening to note. And the Q4 FY '23 EBITDA further improved to INR 5 crores from a loss of INR 2 crores in the corresponding previous quarter. Treasury and other monetizable assets, which are represen
INR 530 crore
hich are represented by Max Towers and the Greater Noida Land parcel stood at a healthy number of INR 530 crores. This includes a significant treasury of INR 80 crores in Antara Purukul Senior Living. Doon pro
INR 80 crore
Land parcel stood at a healthy number of INR 530 crores. This includes a significant treasury of INR 80 crores in Antara Purukul Senior Living. Doon project is PBT positive and on generating su
INR542 crore
nerating surplus cash., On consolidated basis, very strong balance sheet position, a net worth of INR542 crores as of Mar’23. On the residences side in Dehradun, we are only left with four units, two of them
25%
re inhabited by our General Manager and the doctor from in the campus. We have achieved a rise of 25% in our collections from a cumulative INR 510 crores in March '22 to INR 638 crores in March '23.
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Guidance — 20 items
Rajit Mehta
opening
“Doon project is PBT positive and on generating surplus cash., On consolidated basis, very strong balance sheet position, a net worth of INR542 crores as of Mar’23.”
Rajit Mehta
opening
“In fact, a very interesting study by McKinsey recently also pointed out that if you look at set A, set B population in 30 cities, that's about INR1.6 crores, which is our target population.”
Rajit Mehta
opening
“And now imagine the 8 to 10 communities that we want to bring in the future, these are actually captive seniors staying with us and whatever needs they have we will be able to fulfil, which means our customer acquisition costs will start coming down, the way it's coming down in Dehradun or in Care Homes.”
Rajit Mehta
opening
“The project continues to be debt free and cash and PBT positive.”
Rajit Mehta
opening
“Similarly, in Gurugram, is on Sector 36A, which is Dwarka Expressway, very close to Delhi, very beautiful development, part of again a buzzing community and this will be our first attempt in the intergenerational community.”
Chaitanya Shah
qa
“So what is your target for this year in terms of the number of beds that you are planning to open?”
Ajay Agrawal
qa
“But going forward, whenever that market comes and gets improved to that level, we will change our products type.”
Rajit Mehta
qa
“So all care homes will be leased properties.”
Rajit Mehta
qa
“So it depends on the state of the home that we take, but that's the capital cost and the beds will be between 35 to 50.”
Amit Mehendale
qa
“So if you could just enlighten us on these two aspects, that will be helpful.”
Risks & concerns — 9 flagged
To some extent, this helped us neutralise he impact of the rising material cost.
— Rajit Mehta
Is that care home operational and how -- I mean, in terms of reputational impact of that incident.
— Chaitanya Shah
No, it's difficult for me to comment, but our aim is to look -- at least 70-75% occupancy at least.
— Rajit Mehta
So the biggest challenge on the Care Home side is always to find compliant infrastructure.
— Rajit Mehta
Like if I were to be a landlord, and if -- I mean, going by your comments, if I were to get similar terms as a rental yield, then am I incentivized enough -- I mean, is there a challenge on that side to find enough properties to scale up the number of beds?
— Amit Mehendale
So I think the landlord is not a challenge at all.
— Rajit Mehta
So we don't want to take that risk and we don't want to cannibalise our own sales.
— Ajay Agrawal
And once the property gets developed as a care home to take it back into a commercial use is quite difficult because it's been retrofitted for seniors.
— Rajit Mehta
So, some impact because of that are non-room availability, some impact of this quarter as well, which has come through.
— Rajit Mehta
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Q&A — 10 exchanges
Q
Hi, good morning. My question is regarding Care Homes. Could you tell me what are the total number of homes that are operational as of today and the number of beds that we are serving?
Rajit Mehta
There are 150-plus beds, some of that we'll rejig because of the incident, but have 150 beds in NCR. And now we are exploring going into Noida as well. And Bengaluru already entered looking for properties there now. Okay. And the reason for the bed days going down sequentially, the last quarter would be because of the incident, right? Correct. So could you just give me an update on what has happened in the last three months and where you're standing as of today? Happened in what regard? Is that care home operational and how -- I mean, in terms of reputational impact of that incident. What are
Q
Hi, sir. Thank you for the opportunity. My question, sir, is related to Gurugram Care Home. The residence is a lease property for us, or do you own the property?
Rajit Mehta
The Gurugram Care Home, you mean? Yes. Yes, leased. So all care homes will be leased properties. We don't own any Care Homes and we will never. Okay. So the direct cost -- so the contribution margins we are reporting that is after the lease rent or before that? After. Okay, after leasing the care home, I think, we spend around INR1 lakh to develop it, right? No. That depends on the kind of care home that we take on lease. For a full care home model, which means they'll be operating all the services, it's about between INR1 crores to INR1.5 crores capital cost for retrofitting for safety featur
Q
Thanks for the opportunity. So I have a couple of questions. First, on the assisted care business. I just want to understand a little bit on the customer acquisition side. And on the scale up, I mean, we can scale up to – like, there is scale up on the bed, there is one side of the thing and the other side is on the customer acquisition. So if you could just enlighten us on these two aspects, that will be helpful. I'm not looking for numbers. I'm looking more for strategy, like how are we looking to expand? And what growth trajectory can we maintain?
Rajit Mehta
Got it. Understood. So the biggest challenge on the Care Home side is always to find compliant infrastructure. But so far, we've been able to do that because the laws in each state are quite different. And we also got involved with the Haryana government about two years back to take out a specific policy, which has now been notified as well, which covers such facilities. So that's been quite a help. And for the landlord perspective, the steady income for 9 to 10 years easily because they see a stable client and obviously, we'll take it on a long-term lease. The returns to them are in line with
Q
Thank you for this opportunity, sir. A couple of questions from my end. So if you could just highlight some additional details on the intergenerational project at Gurugram, like, how big is the project in terms of units? And out of the total units, what will be the percentage that would be dedicated exclusively for senior living? And also, can we expect the launch of this in FY '24?
Ajay Agrawal
So in Gurugram, the intergenerational key highlights are like the property, the 11 acres, approximately 1/3 will be allocated towards the senior living. Because of the FSI norms in Gurgaon, the 1/3 area of 3.3 acres odd will give us a saleable FSI of 7.5 lakh odd. So then that means, you will have approximately 21 -22 lakhs square feet of development total. We'll be developing the project, as per present planning, we'll be developing it on one phase only to senior living but non-senior will come in two phases. Sure, sir. Sir, do we expect the launch by FY '24 or no? We have just closed the pre
Q
Thank you for the opportunity. My question is about the senior residence, sir. What is the overall strategy in our residencies for senior segment? And will be there any the new launches across all markets purely on for a senior living or it will be integrated?
Rajit Mehta
Yes. So as I said, the plan is to look at 8 to 10 communities in India. Already, we have Dehradun, Noida Phase I already sold out, Gurgaon and Bengaluru, the principal key terms already agreed and signed up. And in the future geographies in Pune, Goa, Chandigarh under progress. So we want to launch 8 to 10 communities in the future, comprising of 4,000 to 5,000 units in all and about 8000, to 10,000 residents, who will occupy these. So, that's the plan for residences. Okay. And do we have greater benefits, if we launch intergenerational communities as compared to standard senior living communi
Q
Yes. Hi, just one question. You mentioned in the case of this Care Home, you said properties are leased, you don't own any of them. So what's the tenor of the lease? And do you have an option to renew? How does this work?
Rajit Mehta
Yes. It's normally a nine-year lease. There's an option to renew it. Okay. That's an option, both, the person can also terminate the lease-- landlord can't terminate the lease earlier or at the end of nine year? What's the incentive for him to not renewal, just curious? Yes, he can. But as I said, the advantage the landlord has today, is the consistency of the annuity income for him. And once the property gets developed as a care home to take it back into a commercial use is quite difficult because it's been retrofitted for seniors. And then you have some sort of like annual escalation in this
Q
Yes. Hello sir. Thanks for the opportunity. Sir, two questions from my end. Firstly, it's good to know that, Noida project is fully sold out. So, can you tell me, what is the expected collections from Noida Phase I project in FY '24?
Ajay Agrawal
Yes. So Noida, we are having a total collection expectation of approximately INR550 crores. That will happen in all years to come. So that's a cumulative end collection, which I'll get. So we are already standing at INR252 crores collection, approximately INR80 -INR90 crores odd is the expectation for FY23-24, and balance would come once, we are going to give the possession in next year. But overall INR550 crores collection in Phase I. Okay. That's Okay. And sir, my second question is like, can you help me with the time line for the Noida Phase II project launch? And what is the sales realizat
Q
Yes. Hi, thanks again. My question is regarding the Noida Phase II. Now, since you're getting this price escalation, is there any impact, positive impact on the IRR that you're expecting? That is one. And secondly, the new projects in Bengaluru and NCR, that you're going into, what is the internal ballpark IRR that you are targeting in these projects?
Rajit Mehta
The price escalation in Noida Phase II also aim to mitigate the material costs that have gone up, as you can see from the market. We've maintained the guidance of 15% to 17% IRR. In the other projects, it depends on project to project or at least plus of 20%, at least, in both the projects in Bengaluru and Gurgaon. And my second question is regarding the Gurugram Care Home. The occupancy rate seemed to have flattened out in the last one year-on-year to 55-56%. So why has that flattened out? And when do you think, can you reach that 70%, 75% level? See, we already have long-stay patients, who a
Q
Thank you very much. Thank you very much for a very engaging call. Thank you for all the questions, which help us clarify our growth strategy, our profitability, our future trajectory. As I said, Antara is the only brand in India, which is creating an integrated ecosystem for seniors. So whether you need independent housing or you need services at home or you need facilities for assisted living or memory care or you need your medical equipment and products in the future, if you need help in wellness solutions for chronic conditions that also will be available through us. And it has been a grea
Management
Q
Thank you.
Management
Speaking time
Rajit Mehta
29
Moderator
11
Chaitanya Shah
11
S Chatterjee
9
Ajay Agrawal
8
Amit Mehendale
5
Anjana Shah
4
Rajat Jain
4
Rohit Mehra
3
Karan Mehra
3
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Opening remarks
Rajit Mehta
Thank you. Good morning, everybody. On behalf of Max India Limited, a warm welcome to all of you for this Q4 FY '23 Earnings Call. For the benefit of the audiences that are joining us for the first time, I have with me my colleagues, Mr. Ajay Agrawal, who is the CFO for Antara Senior Living, and also heads Investor Relations for the company, SGA, our Investor Relations Advisor, also Ishaan Khanna, who's joined us in April as CEO for Antara Assisted Care Services, Sandeep Pathak, who is a CFO for Max India and the Legal Head for the group as well, and Ankit Kalra, the CFO for Antara's Assisted Care and Nishant from Investor Relations team. Yesterday, we already uploaded our investor's presentation, I hope all of you have got an opportunity to see that, but I will just take you through the highlights. Before I delve into the business details, just an update on the unfortunate fire incident that happened in one of our Care Homes in South Delhi, in our wholly owned subsidiary, Antara Assis
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