Max India – Demerger, Will sum of parts be greater than single entity

Excerpt from Q3 FY23 Investor slide deck:

1)Residences for Seniors:

• Antara Dehradun: 1st Community, 96% of units sold as of Dec’22 end, repaid all debt, continues to be cash and PBT positive.

• Focus on sales closure of remaining units.

• Antara Noida Phase 1: 2nd Community, 98% of units sold.

• Antara Noida (Under Construction): Targeting to achieve planned IRRs inspite of cost headwinds through robust sales velocity, price increase and timely delivery. Total 550 units.

• Noida Phase II: Application for revised building plans submitted with Noida. Planning to get RERA application post approval.

• Gurugram (with MEL): DM Fee model aligned for the project along Dwarka Expressway, Massing of the project has been finalised. Work in Progress for revised costing based on final massing.

• Bengaluru: Two potential partnerships identified at Bengaluru. We have engaged IPC for scouting more opportunities at Bangalore.

• Pune: Draft term sheet shared with two landowners at Pune. Working on the financial model and will share the proposal.

2) Care Homes/ Memory Care Home

• Three new Care Homes launched in Delhi NCR, capacity increased by 60+ beds to ~150+ beds in H1FY23
• Care Home (CH): Net revenue at Rs 2 Cr in Q3FY23, grew 100% y-o-y, led by bed addition and improvement in occupancy
• Plan ahead: Optimize Occupancy in existing Care homes, Launch of Care Home offerings outside NCR by FY24, Explore and accelerate quickly scalable models.
• Gurugram CH Proof of success established; Contribution margin improved to ~ 12% in Q3FY23 ahead of business plan assumptions.
• Consistent improvement in occupancy, Break-even achieved at ~45% occupancy against original planned at 60%, High visit to conversion ratio.

3) Care at Home

• Net revenue at Rs 1.72 Cr, growth of 35% y-o-y and contribution margin improved to 14% in Q3FY23.
• Plan ahead: Increase market coverage and achieve scale. Deepening offerings basket and focus on creating differentiated products specially increasing focus on high margin offerings. Increasing service delivery capacity and building strong clinical capabilities.

4) Med care:

• MedCare: Net revenue at Rs 0.8 Cr, grew 18% y-o-y and Contribution margin improved to 3% in Q3FY23.
• Antara branded wheelchair launched, senior specific features incorporated in design, sold ~60 units.
• A Portfolio of over 1,100 Products.
• Plan ahead: Deepen/ build new distribution channels to augment reach, Scale up to new geographies, Build capability for launch of white labelled products.

Balance Sheet: Strong BS position with Net worth of Rs 540 Cr
Consolidated Revenue at Rs 153 Cr in 9MFY23, Up 6%^ y-o-y (Q3 Up 8% y-o-y)
Consolidated EBITDA at Rs 6.5 Cr in 9MFY23, Up 7x y-o-y

Business is still in the investment phase. Seems like promoters are very transparent in their actions/ filings/ investor friendly & ready to accept their mistakes. I think they are trying to establish & prove a proof of concept/model for most of the segments. They are very conservative & trying not to burn more cash & trying to slowly scaling up. As said in previous concalls, once they have a proof of concept in place, they can easily scale up by raising funds.

Break even or profitability may take few more quarters. Key thing is to focus on how management walk their talk & their execution capabilities.

Please feel free to add if I have missed anything.
Requesting fellow members to share their valuable thoughts if anyone is tracking.

D: Invested, Biased. Transaction in last 30 days.

Investor Presentation Link: