The two stocks recommended by SMC Global Securities’ Research Team this week are Max Healthcare and Navin Fluorine. These two stocks have shown great potential with positive financial estimates for the next two financial years. So, let’s go through the details of the two stock recommendations for the period between March 3, 2025 and March 7, 2025.
Max Healthcare Institute Limited
Max Healthcare Institute share price is ₹978.85 (as on February 28, 2025) and its target price is set at ₹1,167 with an upside potential of 19%.
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Max Healthcare Institute Limited: Investment Rationale
- Max Healthcare Institute Limited (Max Healthcare) is one of India’s largest healthcare organizations. It operates 22 healthcare facilities (5,000+ beds) with a significant presence in North India.
- Its Partner healthcare facilities and managed healthcare facilities include state-of-the-art tertiary and quaternary care hospitals located in Delhi NCR and one each in Lucknow, Mumbai, Nagpur, Mohali, Bathinda, and Dehradun.
- It also has secondary care hospitals in Gurgaon and Bulandshahr and medical centres at Delhi NCR, and one in Mohali, Punjab. The hospitals in Mohali and Bathinda are under PPP arrangement with the Government of Punjab.
- During Q3 FY25, average occupancy for the network stood at 75% versus 73% in Q3 last year and 79% in the trailing quarter, while the occupied bed days (OBDs) grew by 36% year-on-year and 8% quarter-on-quarter.
- Average Revenue per Occupied Bed (ARPOB) for the quarter stood at ₹75,900, remaining relatively flat both year-on-year and quarter-on-quarter. Like-for-like ARPOB for Existing Units, however, grew by 7% year-on-year and 3% quarter-on-quarter.
- The international patient revenue stood at ₹201 crores, registering a growth of 28% year-on-year and 8% quarter-on-quarter, despite contraction in patient footfalls from Bangladesh and Yemen due to political unrest.
- The company has achieved EBITDA breakeven within a record time of 6 months from launch at its greenfield hospital in Dwarka. In addition, its recently acquired hospitals in Lucknow and Nagpur have demonstrated a 67% and 118% YoY EBITDA growth, respectively within 9 months of acquisition.
- Moreover, the company continues to successfully pursue inorganic opportunities and acquired the marquee Jaypee Hospital, Noida spread over 18 acres, in this quarter.
- It has also agreed to enter into a built-to-suit (‘BTS’) agreement for establishing a 500-bed hospital in the attractive Thane micro market to expand its footprint in the Mumbai Metropolitan Region and enhance planned capacity at the BTS hospital at Zirakpur, Mohali from 250 to 400 beds.
The foreign investors’ shareholding is highest in Max Healthcare Institute at 57.09%.
Max Healthcare Institute Limited: Valuation
The company has reported a strong performance for Q3, with a 34% increase in revenue and a 32% rise in operating EBITDA. According to management, the company is confident in the continued growth momentum, driven by recent acquisitions and ongoing capacity expansion projects.
The management anticipates a significant ramp-up in capacity over the next 12 months, particularly from the Nanavati, Mohali, and Max Smart facilities. The company is also focusing on optimizing its payor mix and boosting oncology revenue through the introduction of new facilities and services.
Despite challenges in certain markets due to political unrest impacting international patient footfalls, the management remains optimistic about operational efficiencies and revenue growth. Thus, it is expected that the stock will see a price target of ₹1,167 in 8 to 10 months’ time frame on 2 year’s average P/BV of 9.28x and FY26 BVPS of ₹125.78.
Max Healthcare Institute Limited: Risk
- Strict operational and strategic regulation
- Regulatory and compliance risks
Navin Fluorine International share price is ₹3,761.10 (as on February 28, 2025) and its target price is set at ₹4,479 with an upside potential of 19%.
WHY SMC
- 20 Lac+ unique clients
- 33+ Years of Serving
- Advance Technical Analysis
- Free Demat Account
- Navin Fluorine International has the largest integrated fluorochemicals complex in India. The company primarily focuses on fluorine chemistry – producing refrigeration gases, chemicals, inorganic bulk fluorides, and specialty organofluorines and offers Contract Research and manufacturing services.
- It has three manufacturing facilities located in Surat, Dewas, and Dahej. Its DSIR-approved state-of-the-art R&D centre in Surat supports product addition & process efficiency in all business units.
- The company has recently commissioned its agro specialty plant at Dahej with an investment of ₹540 crores. The project will strengthen the product offerings as well as key account relationships along with providing building blocks for future growth.
- In Q3 FY2025, it reported revenue growth of 21% YoY to ₹606.20 crores. EBITDA margins improved to 24.3% as against 15.13% in Q3 FY2024 and from 20.7% in Q2 FY2025, reflecting higher realizations in HPP, higher capacity utilization at Dahej and Surat, and efficiencies secured within businesses.
- EBITDA was thus up by 95% YoY to ₹147.31 crores and PAT (excluding Exceptional Items) was up by 222.9% to ₹83.60 crores.
- In Q3 FY2025, its High-performance Product (HPP) vertical reported volume growth in HFO, R22, R32, and inorganic salts along with improved price realization across its products.
- It is adding R32 capacity of 4,500 metric tonnes, which will be commissioned soon. It remains constructive on the demand outlook for R32 in India and globally. It is engaged with a few global measures for evaluating an enhancement of R32 capacity.
- The progress of the AHF project with an investment of ₹450 crores is on track for commissioning by early FY2026. Regarding the cGMP4 project with a capex of ₹288 crores, the first phase of ₹160 crores investment is progressing as planned and is expected to be commissioned by the end of Q3 FY2026.
- According to the management, it has strong order visibility for Q4 FY2025 and beyond, particularly with the ongoing ramp-up at the Surat and Dahej facilities. It is introducing 1 new molecule in Q4 FY2025 and a second in Q1 FY2026.
- The company is optimistic about its CDMO business segment, supported by a strong order book for Q4 FY2025. On the European CDMO front, the registration formalities are in the advanced stage, and direct dispatches commenced during Q3 FY2025.
- Looking ahead, projections for FY2026 and beyond continue to remain strong, with an order book for CY2025 already secured. The company also anticipates an additional molecule supply in FY2026.
In the overall shareholding of Navin Fluorine International, institutions have the highest shareholding at 28.46%.
The company is focusing on maximizing capacity utilization, enhancing productivity and driving efficiencies across all its business lines while deepening relationships with all customers. It is building new projects to explore growth opportunities for the future.
Thus, it is expected that the stock may see a price target of ₹4,479 in 8 to 10 months’ time frame on the current P/BV of 7.55x and FY26 BVPS of ₹593.27.
- Supply chain issue
- Economic slowdown
Conclusion
These two stocks, one from the healthcare sector and the other from the chemical sector can reach their target price in the coming 8 to 10 months. However, it is always better if you do your analysis before investing and set a stop-loss target. To keep track of your invested stocks, open free demat account with SMC Global Securities and invest on the go.
Reference:
https://www.smctradeonline.com/research/wise-money/241
Author: All Content is verified by SMC Global Securities.
WHY SMC
- 20 Lac+ unique clients
- 33+ Years of Serving
- Advance Technical Analysis
- Free Demat Account
