MAXINDNSEq2fy24November 2, 2023

Max India Limited

7,052words
64turns
10analyst exchanges
6executives
Management on call
Rajit Mehta
MANAGING DIRECTOR – MAX INDIA LIMITED
Sandeep Pathak
CHIEF FINANCIAL OFFICER – MAX INDIA LIMITED
Ajay Agrawal
CHIEF FINANCIAL OFFICER –
Ishaan Khanna
CHIEF EXECUTIVE OFFICER –
Ankit Kalra
CHIEF FINANCIAL OFFICER –
Nishant
INVESTOR RELATIONS DIVISION – MAX INDIA LIMITED
Key numbers — 40 extracted
88%
in the operational income that we have, and the satisfaction scores continue to be high at about 88%. On Noida, we have been saying for a long time, all inventories sold out. Construction is on trac
rs,
saying for a long time, all inventories sold out. Construction is on track for all the three towers, and the finishing work has already started. And we are liaising with the RERA for approvals of Pha
0.7 million
ng have been finalized. There'll be about 288 units approximately that we'll construct with about 0.7 million square feet. Bengaluru, definitive agreement is in final stages. The design architect has been on
1 million
ment is in final stages. The design architect has been on-boarded. That development will be about 1 million square feet, 480 to490 apartments in that range. Hyderabad, we have also finalized the broad co
1.3 million
the next few days, we'll execute the term sheet as well. That's a large development, about 1.2 to 1.3 million square feet, about 750 - 760 kind of apartments on there. And discussion is also ongoing with l
1.5 million
ssion is also ongoing with land owners in, Pune, Chandigarh and Chennai. Our target is to look at 1.5 million square feet of construction every year, and the Gurgaon, Bangalore projects are in the final stag
INR55 crore
in Q4. Coming to the financial results now. On consolidated basis, we have achieved revenues of INR55 crores in Q2 FY '24, which is up from INR46 crores in Q1, but down 10% year-on-year. This we explained
INR46 crore
. On consolidated basis, we have achieved revenues of INR55 crores in Q2 FY '24, which is up from INR46 crores in Q1, but down 10% year-on-year. This we explained last time as well, since we don't have any m
10%
ave achieved revenues of INR55 crores in Q2 FY '24, which is up from INR46 crores in Q1, but down 10% year-on-year. This we explained last time as well, since we don't have any more inventory to sell
INR1.5 crore
the revenue compared to same period last year a little depressed. But our EBITDA has done well at INR1.5 crores in Q2 FY '24 compared to a INR7 crores loss sequentially last quarter and a gain of INR 5 crores
INR7 crore
year a little depressed. But our EBITDA has done well at INR1.5 crores in Q2 FY '24 compared to a INR7 crores loss sequentially last quarter and a gain of INR 5 crores in Q2 FY '23, the reduction, as you kn
INR 5 crore
INR1.5 crores in Q2 FY '24 compared to a INR7 crores loss sequentially last quarter and a gain of INR 5 crores in Q2 FY '23, the reduction, as you know, compared to last year is because we are now investing
Advertisement
Guidance — 20 items
Rajit Mehta
opening
“That development will be about 1 million square feet, 480 to490 apartments in that range.”
Rajit Mehta
opening
“Our target is to look at 1.5 million square feet of construction every year, and the Gurgaon, Bangalore projects are in the final stage of negotiations, that is a clear possibility.”
Rajit Mehta
opening
“They are now operational in Delhi and in Bangalore, and the third one in Gurgaon will be operational before Diwali.”
Rajit Mehta
opening
“This is purely a temporary impact, it'll get neutralized for the next quarter or so.”
Rajit Mehta
opening
“But this mix should stabilize in the quarters to come, and a steady contribution margin will be achieved as we start to do more and more private labels, most products.”
Rajit Mehta
opening
“It's part of a last 200- acre development in which about 460 to 500 units will be constructed.”
Rajit Mehta
opening
“And this will be our first attempt at an intergenerational community for which we'll be providing all the senior living know-how and expertise to developer.”
Rajit Mehta
qa
“We will achieve our number of 360 beds by March '24, as promised.”
Charanjeev Singh
qa
“Would it be the premium location apartments or it will be mainstream?”
Rajit Mehta
qa
“But at this point of time, this is a big execution task for us going forward.”
Risks & concerns — 1 flagged
And anything which is not linked through a product, it's very difficult to make a good business model out of it.
— Rajit Mehta
Advertisement
Q&A — 10 exchanges
Q
Congrats on a good set of numbers, especially in Care at Home and MedCare. I just had a couple of questions on the Care Home business. Have we added any beds in this quarter in the Care Homes business? And does the outlook for FY '24 remain the same?
Rajit Mehta
No. In this quarter, we have not added beds because the beds that we identified and finalized in Bangalore are under fit-outs. They are build-to-suit, about 150 of them. They'll become operational in Jan of '24. The outlook remain the same. We will achieve our number of 360 beds by March '24, as promised. We have 50 more beds in sight in Bangalore, looking out for 50-odd in Chennai, and we're already under discussion about 50 in Noida. So we will meet our guidance. And it will become operational in Jan '24 because in Bangalore, they are basically build-to-suit and fit-outs are also happening n
Q
My question is regarding our Homes. So what I learned is that while we launched Dehradun, it was a kind of premium property. It was INR14,000 per square feet. And thereafter, we said that we shall be staying in more in mainstream something between INR7,000 to INR10,000 per square feet. My question right from there. I happen to visit the site of Gurgaon. Their towers are coming. So that was under-lifted visit, but I saw that site. That site is at a very premium location. So are we putting your towers to the opportunity the apartments which we shall have there? Would it be the premium location a
Rajit Mehta
Yes. So I have been saying for many quarters, we are now in more urban locations compared to Dehradun. Our objective is to achieve a product market fit. So whatever the market needs based on research in terms of size and whatever it can afford in terms of prices, we will do. For example, we had launched Noida at INR6,500 to 7,000 many years back, all inclusive. As we sold, we discovered that the price you know the market can take more and more price revision. So, the last price, we sold over INR10,500 - 11,000. Similarly in Gurgaon, we benchmark what the market price of like developments is ne
Q
My question was within the broad sort of area of senior care, do you feel that you are in most of the verticals that you need to be today? Or are there new initiatives within the broad focus of the company that you're looking to add over the next few years?
Rajit Mehta
So actually, we have done a comprehensive study of what senior need and what the value pools are. So both are important. What senior needs and where the value pool lie. So, it was the biggest value pools were around the Residences for seniors where the CII report said India will need about 250,000 units, and the current supply is only 20 - 25. That was one. Second was assisted living of Care Homes, which is $1.1 billion. Care at Home $3.9 billion. MedCare about $750 million, and now AGEasy is a INR40,000 crores market, we went and did a study. So at this point of time, we are scaling up and ex
Q
A couple of questions. Sir, on the intergenerational project that's coming up in Bangalore. I wanted to understand, do we have any global case study of this model being successful? Or is it going to be something new that we have conceptualized for Indian market?
Rajit Mehta
That's coming in Gurgaon, actually, intergenerational. Bangalore is only a senior-focused development. But in Gurgaon it's intergenerational. And this is the feedback we have been getting when we started our journey int NCR that seniors are looking for more life around them than just senior folks. And some geographies, they also look for if their children can stay at a nearby distance. So that's the attempt we are making. There are international examples available. But the reason we went into this was based on the feedback we received from the market. It is not an idea that we conceived. The f
Q
Sir, I just have two questions on Care Homes business. So sequentially, I've seen that the number -- revenues have been flat sequentially. Even though inoperative beds, that has also increased from 6 beds to 62 beds. So just can you give some color on that front?
Rajit Mehta
So no inoperative beds have not increased. So let me explain that a few calls earlier. So we tried our hand as an operator model where we said that we will tie up with a guesthouse operator who will provide the F&B and the housekeeping services. We provide the care services. However, we discovered that the SLA and TATs were not working. We were not able to maintain the quality. And therefore, we said we'll close down. We'll only operate full-service care homes. And so there are 68 beds operational. These inoperative ones have been shut down. And now we are increasing capacity. The reason you s
Q
A couple of questions from my end. Sir, in Dehradun there is 1 unit occupied by a doctor. So just wanted a sense like will it be sold? Or will it remain like that? And if you can throw some light on what is the surplus that will come in FY '25 from Dehradun?
Rajit Mehta
So that unit also will be sold. Technically, it is sold, but not in the last quarter. So alreadyunder discussions, will be sold. And in FY '25? This is Ajay. In FY '25, we are targeting that in financial year '23-24, all our revenue will kick in as far as the residences leases are concerned. So, FY '24-25, the revenues from maintenance, which will be in tune of approximately INR12 crores to INR15 crores. There will be some income which will be coming for the resale marketing fees, what we are going to earn on some churn, which is going to happen in the residences. Understood. And sir, how is t
Q
So my question is regarding Care Homes. Since it's a new category altogether and we, as investors, we don't have that much exposure to this category and touch and feel of that sort of thing, so is it possible for us as investors to visit this place in Gurgaon say for example, we are based in Gurgaon, to visit your Care Home, so that we can understand the product as it is, that what exactly that product is?
Rajit Mehta
Of course, you can. Please get in touch with us, and we'll organize a visit. No problem at all.
Q
Sir, what would be the average age of the individuals living in the senior living at Dehradun?
Rajit Mehta
Dehradun will be skewed as we got 65 to 75, that kind of band. Noida a little younger, because more in the urban area. But Dehradun about 65 to 75. Okay. And when we are selling homes in this senior living, do we have a criteria for certain age individuals only to be sold? Yes. So for each community, you have to be minimum -- one applicant has to be minimum 55 years as on date of possession. So, you could be 50 years when you are applying for it, it takes 3 to 4 years for construction. So one of the applicant has to be in that age bracket. Okay. And sir, what is our capital allocation plan for
Q
The EBITDA margin, EBITDA has fallen sharply on a year-on-year basis. Can you attribute any specific reason for the same?
Rajit Mehta
As I said in my opening comments, the reason is because we don't have any inventory to sell, the revenue has not gone up, but the capital required for growth is being spent, both in terms of all verticals of Antara Assisted Care. So that is the main reason why the EBITDA has come. But it will get corrected as we start to have more revenue when we launch new residence projects and the new beds in Bangalore. This is a temporary phenomena, it will go away in a couple of quarters. Okay. Are there any plans to enter into Coimbatore as it's a huge market already operational in that city? Part of the
Q
Thank you very much. I really appreciate the questions. It really helps us put our story out there. As I said, it's been quite an exciting quarter for us. The focus is on execution, execution, execution, scale up and growth to be able to meet the commitments that we have already made to you. As I explained last time also, reiterating that you'll find the EBITDA so because of various reasons of no inventory being there to sell the residences side and the investments we are making in growth is a temporary phenomena. It will come off. We remain committed to create the integrated care ecosystem fo
Management
Speaking time
Rajit Mehta
22
Moderator
12
Akshay Kothari
8
Ajay Agrawal
5
Charanjeev Singh
3
Ranodeep
3
Ankeet Pandya
3
Namit Arora
2
Karan Mehra
2
Yug Mehta
2
Advertisement
Opening remarks
Rajit Mehta
Thank you. Good morning, everybody. On behalf of Max India Limited, a warm welcome to all of you on the Q2 FY '24 Earnings Call. For the benefit of people who are joining us for the first time, I have with me Mr. Ajay Agrawal, who's the CFO for Antara Senior Living, and also spearheads Investor Relations for the company; Ishaan Khanna, who is the CEO of Antara Assisted Care Services, Sandeep Pathak, CFO for Max India; and Ankit Kalra, CFO for Assisted Care; and Nishant from 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. So let me start with you, giving you a summary of the quarter, it has been a great quarter, actually. So on the residential side, in Doon, all inventory is now sold out, except for one, which is occupied by our employees. 183 apartments have been handed over. It’s a buzzing community now with 180-plus residents. It i
Advertisement
← All transcriptsMAXIND stock page →