MAXHEALTH - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.9
| Stock Code | MAXHEALTH | Market Cap | 97,634 Cr. | Current Price | 1,004 ₹ | High / Low | 1,314 ₹ |
| Stock P/E | 141 | Book Value | 87.4 ₹ | Dividend Yield | 0.15 % | ROCE | 12.5 % |
| ROE | 9.45 % | Face Value | 10.0 ₹ | DMA 50 | 1,043 ₹ | DMA 200 | 1,102 ₹ |
| Chg in FII Hold | -1.25 % | Chg in DII Hold | 1.17 % | PAT Qtr | 160 Cr. | PAT Prev Qtr | 166 Cr. |
| RSI | 47.9 | MACD | -24.2 | Volume | 46,92,119 | Avg Vol 1Wk | 42,89,714 |
| Low price | 934 ₹ | High price | 1,314 ₹ | PEG Ratio | 4.46 | Debt to equity | 0.08 |
| 52w Index | 18.4 % | Qtr Profit Var | -30.6 % | EPS | 6.60 ₹ | Industry PE | 44.0 |
📊 Analysis: Max Healthcare trades at ₹1,004 with a P/E of 141, far above the industry average of 44.0, indicating steep overvaluation. ROE (9.45%) and ROCE (12.5%) are modest, reflecting average efficiency in generating returns. Dividend yield at 0.15% is negligible, making it unattractive for income investors. The PEG ratio (4.46) suggests expensive valuation relative to growth. Technical indicators (RSI 47.9, MACD -24.2) show neutral-to-bearish momentum. PAT has declined sequentially (166 Cr. → 160 Cr.), highlighting earnings pressure. Debt-to-equity at 0.08 indicates low leverage, which adds financial stability, but valuations remain stretched.
💡 Entry Price Zone: Ideal entry would be between ₹940–₹980, closer to the 52-week low (₹934) and below DMA 200 (₹1,102), offering better valuation comfort.
📈 Exit / Holding Strategy: If already holding, consider a medium-term horizon (2–3 years) while monitoring profitability. Exit strategy should be triggered if price sustains below ₹930 or if ROE/ROCE fail to improve. Long-term holding is not recommended unless earnings growth accelerates and valuation normalizes.
✅ Positive
- Debt-to-equity ratio at 0.08, showing low leverage.
- DII holdings increased (+1.17%), reflecting domestic institutional confidence.
- EPS at ₹6.60, showing steady earnings power despite pressure.
⚠️ Limitation
- Extremely high P/E (141) vs industry average (44.0).
- Weak dividend yield (0.15%), unattractive for income investors.
- PEG ratio (4.46) indicates expensive valuation relative to growth.
- Quarterly profit variation (-30.6%) highlights earnings volatility.
📉 Company Negative News
- FII holdings reduced (-1.25%), showing declining foreign investor interest.
- PAT declined sequentially (166 Cr. → 160 Cr.).
📈 Company Positive News
- DII holdings increased (+1.17%), showing domestic institutional support.
- Stock trading above 52-week low (₹934), showing resilience.
🏭 Industry
- Healthcare sector has long-term growth potential driven by rising demand for medical services and infrastructure expansion.
- Industry P/E at 44.0 highlights Max Healthcare is trading at a steep premium compared to peers.
🔎 Conclusion
Max Healthcare shows modest fundamentals but trades at a steep premium with weak dividend yield and earnings volatility. It is not an ideal candidate for long-term investment at current levels. Best strategy: accumulate only near ₹940–₹980 for medium-term gains. Existing holders should monitor profitability and exit if price drops below ₹930 or fundamentals weaken further.