Sunday, October 23, 2022

MAX INDIA - IN THE FOREFRONT OF AN UPCOMING MEGA TREND.

 



During  last two Diwalis we have discussed two stocks that supports two different mega trends . Adani Total gas and Cosmo ferrites. This year also let us discuss one such stock , that I believe will lead in the forefront of an emerging mega trend  .

 

Ageing is a reality and nobody can escape from this . Nowadays rhythm of life changed a lot and everyone is running behind something that we can’t even define. In our society, even if people making more than enough money, lot of people facing the issue of finding enough time to care their parents. This is where the potential of Senior Care business lies. The senior care market is still at a nascent stage India. As per a 2019 report by consultancy firm McKinsey ,17% of the seniors in India are living alone and I believe this number will increase drastically going forward considering the changing socio-economic situation, increase in the number of  nuclear families , improving  life expectancy that results in increasing senior population in the country etc. Migration of younger generation to foreign countries and unwillingness of their parents to follow the same adding fuel to the loneliness of elders in these days. All these are increasing the business potential of senior care business here .  As per Industry analysis, “out of  the 20,000 senior living units in India, about 55% are operational, while the rest are at various stages of construction. The demand – pegged at about 240,000 units – is almost 12 times the available capacity” . On the basis of this background let us look into the only listed company operating in this sector – MAX INDIA – through its subsidiary ANTARA .

 

ABOUT THE COMPANY

 MAX INDIA evolved through an organizational restructuring in Max group during 2020. It is  now the holding company of Max Group’s Senior Care business Antara. Antara operating in two verticals - Antara Senior living and Antara assisted Care .

 


Antara Senior living is offering independent Residences for seniors.  First Senior residential community of this division started functioning in a 14 Acre facility at Dehradun with 180 apartments in 2020. Its second facility is under construction at Noida with 340 apartments that is expected to ready for possession by 2025.As per latest update ,Company already sold out 300 units out of 340.

 Under the Assisted care division ,it operates  Care Homes, Care at Home, MedCare and  Memory care homes .This division cater to seniors over the age of 55, who need more frequent  interventions in their daily lives due to medical or age-related issues. I strongly believe there is immense scope for these verticals due to more than one reasons like  the increase in seniors  who are attaining an age where they are in dire need of any type of home care due to increasing life expectancy .

Care homes are specialized residential facilities meant for short- and long-term care, pre & post-operative care and memory care for seniors. These assisted living facilities provide primary health care and emergency response services.

Care at home providing  personalised care and attention under the guidance and supervision of reputed clinicians.  A team of highly trained professionals provides care in the comfort of elder’s home itself Instead of taking the sick and elderly people out for their homes for meeting appointments and treatment. This is bringing the much needed care and services to the home which is  more convenient both for elders and those who are responsible to provide care to them. In addition to the above it is a fact that senior home care is a rather affordable route for giving people the help that they need compared with treating them in a hospital. This division’s service includes diagnostics, nursing care , physiotherapy ..etc

MedCare division providing a range of medical products and equipments on rent/ sale for the  recovery and well-being of elderly people .

Under the Memory Care homes division Antara takes care of Dementia patients and assists them in carrying out their everyday tasks. Recently company opened its first dedicated residential Memory Care Home in Gurugram for Dementia patients. Max now planning to add  35-40 more care homes/ memory care homes  with a bed capacity of approximately 2000 .

This is the brief business profile of the company. Since more details are available in company’s website, I am not going in-depth. ( Link of Investor presentation and latest Conference call provided at the bottom which will help you to understand more about the Industry and specific to the company )

 Why MAX INDIA ?

It is a fact that few other business groups are keenly looking to tap the opportunities in this sector .But  I strongly believe , MAX group is one of the most eligible business group to run  such a business because of their experience in running hospital/medical business for decades. In addition to this, company having a treasury Corpus of  around Rs.300 Cr (after recent buy back) and other monetizable assets of worth Rs 160 crore to fuel its growth going forward and its current market cap is even below the combined figure of these liquid resources. Promoters didn't participate in the just concluded buy back ,hence their stake in the company increased from 40 % to above 51% .

Conclusion



 According to the Global Health and Aging Report by the World Health Organization, people aged 65 and above is projected to grow from an estimated 524 million in 2010 to nearly 1.5 billion in 2050. In the US alone, senior care is an established industry valued around $750 Billion at present and growing at 6% per year. 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 way of thinking, more disposable income in the hands of citizens, possible government aid for senior care etc., I believe this industry having huge potential going forward. In last FY company reported a turnover of Rs.230 Cr .Since this business is just taking off and company is now in the investment phase ,this is not  a stock who are looking for historic data like  ROE,ROCE, P/E ..etc at this stage and this company may not report any commendable numbers for another few quarters . But I strongly believe they are in a sweet spot with enough resources and experience, management bandwidth, huge business potential ..etc and able to deliver good return to share holders in the years to come. Max India is currently trading around Rs.80 in both exchanges.

Once again wishing a Happy Diwali to all my dear friends  ...


For more details and Reports , go through the following links.

Antara Company Website Link HERE

Antara Senior living Apartment Video Tour HERE

Max India Investor presentation HERE

Max India Q1 FY 2022-23 Conference call Audio link HERE

Article on Senior Care business LINK1 , LINK2

Discl:

P    Above note is prepared only for educational purpose .Part of data used in the above note taken from publicly available sources and credit of the same goes to the original owner . Few sentences are copy pasted without any editing . Personally holding shares of Max India  , hence views expressed here may be biased , do own due diligence before taking any investment decision.


 



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