MAXINDNSEQ1 FY24June 30, 2023

Max India Limited

6,746words
63turns
10analyst exchanges
6executives
Management on call
Rajit Mehta
MANAGING DIRECTOR, MAX INDIA LIMITED
Ajay Agrawal
CFO, ANTARA SENIOR LIVING AND HEAD OF INVESTOR RELATIONS, MAX INDIA LIMITED
Ishaan Khanna
CEO, ANTARA ASSISTED CARE, MAX INDIA LIMITED
Sandeep Pathak
CFO, MAX INDIA LIMITED
Ankit Kalra
CFO, ANTARA ASSISTED CARE, MAX INDIA LIMITED
Nishant Kumar
INVESTOR RELATIONS, MAX INDIA LIMITED
Key numbers — 40 extracted
Rs. 46 crore
ifting to the financial performance for Q1 FY24, on a consol basis, our revenues remained flat at Rs. 46 crores, obviously because the inventory in Dehradun, we only have one left, Noida is all gone and the n
7 crore
ing into will take time to come up. That's the reason it's flat. Our consol EBITDA loss stands at 7 crores as against a gain of 1 crore, which reflects all the investments that we are making in the growt
1 crore
e up. That's the reason it's flat. Our consol EBITDA loss stands at 7 crores as against a gain of 1 crore, which reflects all the investments that we are making in the growth journey. Our treasury and
Rs. 520 crore
re making in the growth journey. Our treasury and monetizable assets stood at a healthy number of Rs. 520 crores as of June 23. The Company has a strong balance sheet position with a consolidated net worth of
Rs. 532 crore
s as of June 23. The Company has a strong balance sheet position with a consolidated net worth of Rs. 532 crores as of June end. On the residential site for Dehradun, as I said, all except one unit and that's
Rs. 646 crore
staying. All units have been sold as of July, ’23. The cumulative sales collection now stands at Rs. 646 crores in June;23 as against Rs. 552 crores in June ‘22, which signifies a 17% growth. On Noida Phase-1
Rs. 552 crore
of July, ’23. The cumulative sales collection now stands at Rs. 646 crores in June;23 as against Rs. 552 crores in June ‘22, which signifies a 17% growth. On Noida Phase-1, all units sold within March ‘23. We
17%
now stands at Rs. 646 crores in June;23 as against Rs. 552 crores in June ‘22, which signifies a 17% growth. On Noida Phase-1, all units sold within March ‘23. We have achieved a cumulative collecti
Rs. 284 crore
On Noida Phase-1, all units sold within March ‘23. We have achieved a cumulative collection of Rs. 284 crores, which is 1.3x growth over last year and our collection efficiency continues to be very healthy
1.3x
units sold within March ‘23. We have achieved a cumulative collection of Rs. 284 crores, which is 1.3x growth over last year and our collection efficiency continues to be very healthy at 97%. During Q
97%
which is 1.3x growth over last year and our collection efficiency continues to be very healthy at 97%. During Q1 FY24, we have a sales collection of Rs. 32 crores and in terms of construction, we are
Rs. 32 crore
ion efficiency continues to be very healthy at 97%. During Q1 FY24, we have a sales collection of Rs. 32 crores and in terms of construction, we are on target. The top floor slabs for all the three towers in
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Guidance — 20 items
Rajit Mehta
opening
“Definitive agreements are currently under negotiation, will be closed and hopefully in the next few months or so, we will also start filing for approvals for these communities.”
Rajit Mehta
opening
“This will be available in Phygital, which means digital journey as well as infrastructure available for seniors to come to us.”
Rajit Mehta
opening
“In the initial phase, we plan to offer products and services for two conditions in two cities under this platform.”
Rajit Mehta
opening
“32 crores and in terms of construction, we are on target.”
Rajit Mehta
opening
“This temporary as you know, in the next two quarters or so, this impact will be neutralized.”
Rajit Mehta
opening
“Just want to reiterate that Antara is the only branded organization which is attempting to create an integrated care ecosystem for seniors, which means whatever needs they have at different stages of their life and depending on their medical condition, we will be able to offer them product services or solutions because we have unique competencies of knowing how to operate healthcare, hospitality and real estate, all available to us under one roof.”
Rajit Mehta
opening
“A very interesting study done by McKinsey recently pointed out that if you look at top 30 cities in India and Sec A, Sec B in terms of income cuts, that's about 1.6 crores of target addressable market and these people are spending already Rs.”
Rajit Mehta
opening
“Quite eager to launch Noida Phase-2, which will be about 240 units, just waiting and working with Noida and RERA authorities for approval.”
Kishan Tosniwal
qa
“And the second question is the year-on-year or the quarter-on-quarter revenue is flat, though our revenues are flat, but what the management is guiding looking at whatever you are saying, what we should expect from this Company, let's say 2 years down the line?”
Rajit Mehta
qa
“So, I guess in the next 3 to 4 quarters, you'll find a change in this trajectory because we would have started to sell the new project that we have signed up, which is Gurugram and Bangalore.”
Risks & concerns — 6 flagged
As I said, I can give indicative statements about the future, very difficult to say exactly, but the reason you find the revenue flat because I said we sold all the inventory already in Noida and in Dehradun and we're investing into growth.
— Rajit Mehta
So, I think the stigma of memory care will soon in the next 2-3 years subside, because the fact of the matter is handling such people at home is becoming increasingly difficult.
— Rajit Mehta
And my second question is that want to understand the reason of the decline in the Gurugram Care Home unit and also you guys had mentioned that in Q4, there was some impact on the occupancy levels in the care home business because of the fire incident, is that episode behind us?
— Harsh Kandanani
On the Gurugram contribution decline, yes, that is primarily because change in mix of channel.
— Rajit Mehta
The only challenge which is happening because some of the expenses for Phase-2 will have to do for Phase-1 without which we would have planned to spend only when we would have got the Phase-2 registration that will be an over and above expenditure for which we will be funding the project.
— Ajay Agrawal
Part of it was being handled by the guest house operator and we found it very difficult to get the kind of quality and turnaround time we'd expected.
— Rajit Mehta
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Q&A — 10 exchanges
Q
I have two to three questions. The first question is what is the net cash that we have on the books as of 30th June? Is it the treasury on the other assets is 530 crores, if I'm looking at the correct picture?
Rajit Mehta
So, you're talking about net net cash available, right? Yes. About 263 crores of cash and cash equivalents, about 160 crores of monetizable assets in terms of real estate and land, and about 100 crores of surplus cash is lying on Antara Purukul. And the second question is the year-on-year or the quarter-on-quarter revenue is flat, though our revenues are flat, but what the management is guiding looking at whatever you are saying, what we should expect from this Company, let's say 2 years down the line? What is your focus and where do you want to take this Company to or which level you want to
Q
I have a slightly longer question, so beg your pardon Rajit. So, those who track the US biotech sector would know that one in every three born today will have dementia at some point in their lifespan, thanks to factors such as rising pollution levels, unhealthy lifestyles and longer lifespan with 90 years becoming average age and so on. And now we know that brain disorders are actively reported, assessed, and they're treated and monitored in developed countries, US, India as example, but in India there is a significant underreporting of neurological disorders, including dementia. It's a three-
Rajit Mehta
Thank you very much. I think these are great questions and very good observations, I must say. Let me respond one by one. You're absolutely right, memory care is under diagnosed and under reported and this I can speak from my health care experience. So, the numbers are about 17%, you know of dementia. That number is quite different from what is being reported. You are absolutely right. Already, we are seeing movement. So, for example not-for-profit alliance called Dementia India Alliance, DIA got formed a few months back led by Dr. Radha Murthy and Dr. Gangadharan from Bangalore Nightingales M
Q
This is actually Harsh Kandanani from Aionios Alpha. Just a couple of questions from my end. Wanted a detailed update on the Noida Phase-2 project as to what are the timelines you are seeing for the launch and when do we expect to start selling units from this project? And my second question is that want to understand the reason of the decline in the Gurugram Care Home unit and also you guys had mentioned that in Q4, there was some impact on the occupancy levels in the care home business because of the fire incident, is that episode behind us?
Rajit Mehta
Noida Phase-2 as I said, we had initially filed for approval for RERA. They've come back to us saying that they need additional information and that is currently being filed under discussion. So, we are hoping in the next 90 days or so we should hear positively on that. By the way, some part of the construction activity for Phase-2 has already begun because as we start to get ready to hand over possession sometime next year to residents in Phase-1, they have to be conscious of how much construction activity we have to complete before that, particularly piling work, which could cause some damag
Q
So, can you please share Noida aggregate receivables and the construction cost yet to be spent for Phase-1?
Ajay Agrawal
The Phase-1 construction cost to be spent is approximately Rs. 200 crores. And we have a receivable of approximately Rs. 100 crores (for the year), and we have a cash surplus also available with Rs. 100 crores. And we have a credit line also with us from ABFL amounting approximately Rs. 35 crores. So, we are sufficiently funded for Phase-1. The only challenge which is happening because some of the expenses for Phase-2 will have to do for Phase-1 without which we would have planned to spend only when we would have got the Phase-2 registration that will be an over and above expenditure for which
Q
So, I have two questions. First is in our Care at Home segment, we are providing healthcare workers for nursing at home, right? So, what I have seen, and this is a very common factor is that the healthcare worker will try to make a deal with the customer and work for them directly by eliminating the middle agency or the service providing agency. So, what are we doing to tackle this problem?
Ishaan Khanna
Hi, Ishaan here. So, what we do, Rohit is that we have a team leader visit every week so the service goes on for say 2 weeks. We have a team leader who is a senior healthcare supervisor working with us. So, he or she visits the home where the service is being provided and make sure that there is no misalignment and we also constantly stay in touch with the patient and the family. The other thing, Rohit is that if you would do a deal directly with the nurse, then any coverage on absenteeism, any refresher training and any oversight of supervision and any escalation which can be handled by a doc
Q
I have just two questions. In the financial statements, I see the employee benefit expense has gone to Rs. 18.5 crores. That's almost an 80% jump from the previous quarter. Is this because of the ESOP?
Ajay Agrawal
You are comparing it from quarter previous Q1 ‘22 or you're comparing from March? From March. March has seen some annualization of variable pay, so we have been providing the variable pay as per 100% MOS. But then in 31st of March of our internal calculation, the MOS was not met 100%, so there was a reduction in provision of MOS. That's one effect. Second, all the VPs etc. has been debited at this quarter plus the ESOP expenditure has been added this, that's the reason for the difference. So, if you will compare from our June ‘22 quarter, the amount to be pretty straight, the March ‘23 and Jun
Q
I have questions on the digital front actually. There is one platform which has been talked about. So, can you give some idea about it like what it is all about, is it going to be just for the engagement perspective or are there some revenue potential as well from there?
Rajit Mehta
No. This is a digital platform addressing chronic conditions for seniors is very specific, is not for building a community or engagement or interaction. It is addressing chronic diseases. For example, a knee pain, for example hypertension in the future, etc. So, these are solutions that we offer. It's a combination of products and services. And therefore, there is definitely a revenue model which comes from both products and services. Now I'm not able to say more than this since we are very close to launch, but in the next earning call you'll find far more details. So, we're launching the firs
Q
So, just on the care home which got fired, are we saying discontinued that facility or we have shifted it to somewhere else?
Rajit Mehta
looking for alternate 75-80 beds incremental, we discontinued that.
Q
My first question is that in the intergenerational community that the Company will develop, so what will be the mix here and how many towers are dedicated only for seniors and how many for others?
Ajay Agrawal
So, approximately 33% of the total FSI would be coming to senior living. That would mean we are still in the massing stage, but intuitively there will be two towers approximately 300 to 350 flats for senior living, two towers for senior living. And sir, what is the amount of surplus that will be coming from this Dehradun project annually? So, annually, we'll be having a billing if at a steady state I feel. Once we are all sold out and if I'm doing a steady state billing, it would be approximately Rs. 20 crores of revenue, which would be coming on an annual basis. And if we feel that approximat
Q
So, thank you very much everybody. Appreciate both the questions and suggestions and thank you for your support. As I said, we are committed to creating an integrated ecosystem for seniors, which is comprising of all the verticals I talked about, the Residences for Seniors, Care Homes, Memory Care Home, Care at Home, MedCare and now the digital platform. Appreciate your support and hopefully in the next few quarters, you'll find more and more updates from us on our growth journey. So, thank you for joining.
Management
Speaking time
Rajit Mehta
18
Moderator
12
Ajay Agrawal
6
Viresh Sangwan
6
Dharmesh Haria
4
Kishan Tosniwal
3
Rohit
3
Karan Mehra
3
Sajal Kapoor
2
Nitin Gandhi
2
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Opening remarks
Rajit Mehta
Thank you. Namaste, and good evening to all of you on the call. On behalf of Max India Limited, a warm welcome to all of you for this Q1 FY24 Earnings Call. For those of you who've been in this journey with Max, thank you very much for your support. And for all the new ones who are joining for the first time, special welcome. I have with me my colleagues: Ajay, who's the CFO for Antara Senior Living and also the Head of Investor Relations; Ishaan Khanna, who's the CEO of Antara Assisted Care; Sandeep Pathak, who's the CFO for Max India, and Ankit Kalra, who's the CFO for Antara Assisted Care; Nishant from the Investor Relations team and of course SGA, our Investor Relations Advisors. We've already uploaded the investor release on the exchanges and I hope everybody had an opportunity to go through the same. I would like to first start with sharing with you that our expansion plans are on track and we are making investments with several strategic initiatives which will help us accelerate
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