@desaidhwanil bhai - i mentioned “Recently, deals worth 3.2 cr per bed have taken place (Medanta) based on the type of hospital and specialty segments (secondary, tertiary care).” Max definitely has 53% of its revenue coming from tertiary care, which is definitely a reason for higher valuation. Though, i am not sure… by how much. Probably will have to check the deals that have gone through and there tertiary care revenue component. Also, one important consideration, as i mentioned above is the brownfield expansion potential. Here in case of Max, bed size can be doubled in the existing premises of Max Hospitals.
Though, what i don’t understand is - If Apollo being market leader is valued at 1.5 cr per bed, will market value Max Healthcare more than the leader? Probably the thing is how market values it (based on p/e, ev/ebidta), and how the acquirer values it. Acquisition costs are usually very high as we have seen with so many hospital deals, whereas the valuation market assigns to hospitals is much lower than that. Take for instance -
Kovai is currently being valued at 1.25 cr per bed.
Indraprastha is trading at 0.75 cr per bed
Apollo - Around 1.5 cr per bed
Why are acquisition cost higher than what the market is assigning to these players?