Hi sureshwaran1,
Senior care is an emerging sector in India, many believe it will be a upcoming mega-trend and I think Max India is the only listed player in this space. Almost debt free, Strong BS position with net worth of Rs 540 Cr, current Mcap ~ 400cr. Recent capital reduction scheme was at 85rs per share.
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Senior care market is still at a nascent stage India. As per a 2019 report by McKinsey ,17% of the seniors in India are living alone. This number will increase drastically in future going forward due to increase in the number of nuclear families, improving life expectancy, Migration of younger generation to foreign countries. I currently live in the UK & there are many well established care homes here having good profitability, trading at 5x sales.
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The demand for senior living space is pegged at about 240,000 units, is almost 12 times the available capacity. As per available statistics, percentage of senior citizens in India to total population is about 8% which is expected to increase to 20% by 2050. Considering the huge population of India, changing life style and change in society view about Care homes, better disposable income in the hands of citizens, possible government aid for senior care can create big opportunities in this sector.
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Max group has a history of spotting early trends like how they started Max life insurance, Max healthcare in 2003 (A time when no one was much aware of insurance & private speciality hospitals). In 2020 they demerged Max Healthcare & it listed at 10k crore Mcap & now at around 40k Mcap. They have a history of creating shareholder wealth by scaling via foreign private investors & JV. Honest promoter group with good corporate governance standards & transparency.
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IMHO, I don’t think every bizz needs to be heavily moated to create wealth. Max India has an early bird advantage here as they started off in 2012 & they have learned their lessons from asset heavy Dehradoon project & they have turned asset light now. So I feel they are not a real estate play anymore.
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Compared to any “builder with deep pocket” Max has some unique competitive advantages in patient care, Existing tie ups with many hospitals/doctors, Brand building, having scale up partners from their previous experience in setting up Max healthcare, Please check AR about the profile of their MD & other team members.
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In case of senior care / Hospitality sector, it is all about creating a new segment, earning trust from customers than a pure play real estate.
Though above are few positive triggers, I am closely watching their execution & bizz scale up in the next few quarters/years.
I am in a wait & watch mode for now, Let us see how this pans out. Giving a larger time frame on this investment as it may take time for the bizz to scale up & turn profitable. Cheers
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