Detailed Rationale

Crisil Ratings has reaffirmed its ‘Crisil BBB+/Stable/Crisil A2’ ratings on the bank loan facilities of Maxivision Eye Hospitals Private Limited (MEHPL; part of the Maxivision group).

 

The ratings continue to reflect the established presence of the Maxivision group in the eyecare segment, aided by strong brand and the management's extensive experience, strategic investments fueling the growth and comfortable financial risk profile. These strengths are partially offset by competition from other clinics and hospitals and exposure to risks related to ramp up and stabilisation of operations in the proposed units.

Analytical Approach: Consolidated

Crisil Ratings has combined the business and financial risk profiles of MEHPL and its subsidiaries, Dr Sharat Maxivision Eye Hospitals Pvt Ltd (SMEH; recently merged with MEHPL), Dr Ramalinga Reddy Maxivision Eye Hospitals Pvt Ltd (RRMEH), Sri Mahalaxmi Maxivision Eye Hospitals Pvt Ltd (MMEH), Netradeep Maxivision Eye Hospitals Pvt Ltd (NMEH), Sachdev Maxivision Eye Hospitals Pvt Ltd, Malabar Maxivision Eye Care Pvt Ltd, Ojas Medicare Pvt Ltd and Dr Rani Menon Maxivision Eye Hospital Pvt Ltd given their common business and fungible cash flow.

 

Crisil Ratings has treated the funds infused by private equity investor of Rs 470 crore as quasi equity as the same carries nil coupon and is convertible to equity in 2025-2026.

 

Goodwill arising out of the acquisitions is amortised over a period of five years from the date of the respective acquisitions as per Crisil Ratings criteria.

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers & Detailed Description

Strengths:

• Extensive industry experience of the promoter: The group's business risk profile continues to benefit from the experience of its promoter, Dr G S K Velu, who has been in the healthcare industry for almost two decades. Apart from MEHPL, he is also associated with other prominent organisations in the healthcare sector such as Neuberg Diagnostics Pvt Ltd, Apollo Dialysis Pvt Ltd, Trivitron Healthcare Pvt Ltd, Alliance Dental Care Ltd and Kauvery Group of Hospitals.

 

• Established presence in the eyecare segment: The Maxivision group operates in the specialised eyecare segment in Andhra Pradesh and Telangana. The experience of the promoter helps the group provide a wide array of ophthalmology services, including laser refractive surgeries, cataract surgery, treatment for glaucoma and diabetic retinopathy. The company has lately expanded to other states such as Tamil Nadu, Kerala and Gujarat and is in the process of expanding the geographical reach.

 

• Strategic investments in the past 2-3 years fueling growth: The company has acquired several established eyecare centres across geographies which has helped it to expand its reach and market position. Multiple brownfield acquisitions and revenue contributions from green field expansions helped in increasing the revenue to Rs 370-380 crore in fiscal 2025 from Rs 242 crore in fiscal 2023. The business risk profile also takes note of the expected improvement in the business performance of the group with additional revenue inflow from the recently concluded brownfield expansions and acquisitions in process. Further, the group is expanding its market presence with significant number of green field expansions which will also contribute to the topline. With acquisitions and greenfield projects enhancing market presence, the group is expected to achieve revenue of above Rs 500 crore in fiscal 2026 while maintaining healthy profitability.

 

• Significant improvement in the financial risk profile: Adjusted networth improved significantly to over Rs 600 crore backed by fund infusion by private equity investor as on March 31, 2024. Debt has substantially reduced, resulting in strengthening of the capital structure and improvement in debt protection metrics. With no major debt-funded capital expenditure immediately in pipeline and the internal accrual and cash balance sufficient to cover the brownfield acquisitions in process, the financial risk profile is expected to remain strong in the medium term. The debt protection metrics are also expected to remain healthy with interest coverage ratio above 15 times.

 

Weaknesses:

• Competition from other hospitals/standalone clinics: The group faces competition from other large multi-specialty hospitals and neighborhood eye clinics. Despite multistate presence, the group continues to face competition from neighborhood eye clinics for smaller procedures such as cataract. For complex procedures, other large multi-specialty hospitals remain the key competitors. With expansion in new geographies, the group faces further competition from other established players in those regions.

 

• Exposure to risks related to ramp up and stabilisation of operations in the proposed units: The group is in the phase of rapid expansion stage hence will remain exposed to risks related to ramp up and stabilisation of operations in its newly added centres, which typically incur high costs during the initial phases. Any delay in the ramp-up and stabilisation of operations in its new centres can adversely impact the profitability and financial risk profile, particularly liquidity which remains monitorable.

Liquidity: Adequate

Liquidity remains comfortable with strong available cash balances which are expected to be largely utilised towards greenfield and brownfield expansion. Annual net cash accrual is expected to be over Rs 70 crore against yearly debt obligation of around Rs 10 crore over the medium term. Debt has substantially reduced post fund infusion by private equity. The company also has working capital limit, which is minimally utilized.

Outlook: Stable

Crisil Ratings believes the group’s business performance will improve over the medium term backed by the completion of ongoing expansion plans and strategic joint ventures with other players.

Rating sensitivity factors

Upward factors:

• Increase in revenue to Rs 550-600 crore and maintaining healthy operating margin
• Sustenance of healthy capital structure and debt protection metrics

 

Downward factors:

• Adverse impact on the financial risk profile or liquidity owing to proposed expansion plans
• Losses in the upcoming brownfield and greenfield projects moderating the operating margin below 15%

About the Group

• MEHPL was set up in 1995 by Dr Kasu Prasad Reddy and acquired by Medfort Hospitals Pvt Ltd (MHPL) in 2011. MEHPL was merged with MHPL and MHPL was renamed Maxivision in July 2016. MEHPL specialises in refractive treatment and operates a chain of eyecare clinics, majorly in Telangana and Andhra Pradesh.
• SMEH was established in 1993 by Dr C. Sharat Babu at Hanamkonda, Warangal. SMEH runs eyecare clinics and specialises in cataract surgeries.
• RRMEH: founded by one of the most sought-after ophthalmologists in and around Narasaraopet, MEHPL holds 51% stake in this super speciality eye hospital
• MMEH: Founded in 2011, provides services for cataract surgeries, refractive errors, reduced vision treatments and contact lens prescriptions to the region of Vanasthalipuram. MEHPL holds 70% stake in the entity.
• NMEH: Netradeep Eye Hospitals started back in 1987, has presence in Gujarat. MEHPL holds 51% stake in the entity.
• The Maxivision group also recently acquired 70% stake with Dr Rani Menon’s Eye Clinics to form Dr Rani Menon Maxivision Eye Hospitals with its three branches in the central Kerala regions of Thrissur, Guruvayur and Ottupara, Wadakkancherry.
• Malabar Maxivision Eye Care Pvt Ltd (Recent acquisition)- MEHPL acquired 70% stake in Kerala-based Malabar Eye Hospital in fiscal 2025 and Malabar has become subsidiary of MEHPL.
• Ojas Medicare Pvt Ltd (Recent acquisition): MEHPL acquired 51% stake in Maharastra-based Ojas Medicare and hence has become subsidiary of MEHPL.

Any other information: Not applicable