Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Max India Ltd (BOM:543223, Financial) reported significant progress across all business verticals in Q1 FY25.
- The company has added 136 new beds to its Antara Assisted Care services, increasing operational capacity to about 200 beds.
- Operational revenue from the Dehradun community increased by 17% over the corresponding last quarter, with a cash surplus of about INR120 crore as of June '24.
- The Noida Phase 1 project has achieved a 99% collection efficiency, indicating high-quality customer acquisition.
- The company has launched new products for respiratory rehab, expanding its product offerings for senior care.
Negative Points
- The RERA application for Noida Phase 2 was rejected, causing a temporary setback and potential delays in project launch.
- Consolidated EBITDA loss increased to INR21.5 crore in Q1 FY25 from INR16 crore in Q4 FY24 due to no inventory to sell in the residences vertical.
- The Bangalore care home is still in the early stages, with only 30 show-arounds and no confirmed move-ins yet.
- Employee expenses have increased due to annual increments and new geography launches, impacting overall costs.
- The company is still awaiting RERA approval for the Gurugram project, which could affect timelines and project execution.
Q & A Highlights
Q: How are we going to use the INR250 crore that we are planning to raise?
A: That's the growth capital that we need for all those businesses over the next two to three years. So it's basically growth capital. (Rajit Mehta, Managing Director and CEO)
Q: Which category will the newer care homes cater to? Will they predominantly be memory care homes or any other utilization? Is there any difference in the pricing model and the margin profile?
A: We have only built one memory care home so far. All the new care homes are primarily focused on assisted living and some on transition care. The economic model remains the same, but the margin profiles will be a little better because of transition care. (Rajit Mehta, Managing Director and CEO)
Q: What is the update on the Noida Phase 2 project?
A: The Phase 2 RERA application has been rejected. We have appealed to the appellate authority. The issue is around the ambiguity in Sector 150, but we are hopeful for a favorable order. (Rajit Mehta, Managing Director and CEO)
Q: How has the early response been in terms of occupancy at the Bangalore care home?
A: The Bangalore care home has been opened for show-arounds just a week back. We have had 30 show-arounds till date and expect move-ins to start in the coming few weeks. (Unidentified Company Representative)
Q: Can you explain the shift from an asset-heavy to an asset-light model?
A: We are now partnering with developers who have their own land or are partnered with landowners. We bring our know-how of senior living, design specifications, sales capabilities, and operating the community. (Unidentified Company Representative)
Q: What is the current debt-equity ratio?
A: We have no debt on our books apart from vehicle loans, which are very sundry debts. (Rajit Mehta, Managing Director and CEO)
Q: How much of the growth capital is deployed in Q1 and how much is estimated to be spent in FY25?
A: For the June quarter, the deployment for the residency business is INR3 crore and for Antara Assisted INR36.5 crore. For the next nine months, the plan is around INR135 crore for residences and INR140 crore for Antara Assisted. (Unidentified Company Representative)
Q: What is the update on memory care homes? How is the occupancy panning out?
A: The memory care home has been operational for 60 days and currently has six residents, which is around 25% occupancy. (Unidentified Company Representative)
Q: Do you have any cash or cash equivalents on your books and how much?
A: We have INR243 crore in cash and cash equivalents. (Rajit Mehta, Managing Director and CEO)
Q: What is the timeline for the capital that the company is planning to raise?
A: Over the next 12 to 18 months, and it might come in one or two tranches. (Rajit Mehta, Managing Director and CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
