Max Healthcare Institute Limited
Q1 FY26
Call date · August 14, 2025
1 · Management Commentary
Key Positives
- Network revenue grew 27% YoY to Rs. 2,574 crores; operating EBITDA up 23% YoY to Rs. 613 crores.
- 19th consecutive quarter of YoY growth, driven by successful integration of recent acquisitions.
- Occupancy for Existing Units reached 78%+; base hospitals at ~80%.
- Digital revenue at Rs. 744 crores (29% of total), up 61% YoY; international patient revenue up 32% YoY.
- Free cash flow of Rs. 389 crores; strong growth in Max@Home (22% YoY) and Max Lab (19% YoY).
Key Negatives
- Network operating EBITDA margin dipped 3% QoQ due to annual increments and new capacity hiring.
- Net debt increased to Rs. 1,755 crores from Rs. 1,576 crores at March 2025-end.
- ARPOB growth muted at 1% headline due to lower ARPOB in new/acquired hospitals.
Forward Guidance
- Capex: Rs. 435 crores deployed in Q1 for expansion; net debt expected to rise by Rs. 400-500 crores by FY26-end.
- New beds: ~1,000 brownfield and 500 greenfield beds to be added in FY26; multiple projects (Nanavati, Smart, Lucknow, Gurgaon, Nagpur, Patparganj, Saket, Mohali, Vaishali, Thane, Pitampura) at various stages.
- Oncology: New Dehradun facility (130 beds) to focus on advanced oncology; radiation oncology to be added in Lucknow and Dwarka in Q3.
- Divestment: Chitta and Anoopshahr hospitals to be divested for Rs. 40 crores by Sep’25.
- Margin outlook: Management expects improvement in EBITDA per bed and ROCE, but not necessarily in margin % due to mix changes.
- Strategic focus: Continued expansion in super-specialty care, digital, and international business.
2 · Q&A Highlights
Q 1 (Composite): How is growth in base/existing hospitals versus new/acquired units, and what is the outlook for occupancy and ARPOB?
A (Management):
• Base hospitals (excluding last 12-15 months’ additions) saw 7% ARPOB growth, 5% OBD growth, and 13% revenue growth; occupancy at ~80%.
• New units dilute headline ARPOB but are expected to ramp up over time.
• Occupancy in new units (e.g., Dwarka) already at 81-82%; overall network occupancy stable at 76%.
• ARPOB growth for the network is muted due to mix, but underlying units show strong growth.
Q 2 (Composite): What is the status and impact of ongoing and upcoming capacity expansions?
A (Management):
• Multiple brownfield and greenfield projects progressing as planned; phased commissioning expected through FY26 and beyond.
• Doctor and staff hiring largely completed ahead of new bed additions; incremental hiring will be gradual.
• Expansion expected to drive growth, with brownfield beds ramping up quickly.
Q 3 (Composite): How is the international patient business performing and what are the drivers?
A (Management):
• International revenue up 32% YoY despite geopolitical headwinds; growth driven by direct-to-fly offices and focused international marketing.
• New geographies, including developed countries, contributing to growth.
Q 4 (Composite): What is the outlook for net debt and leverage given expansion plans?
A (Management):
• Net debt expected to rise by Rs. 400-500 crores by FY26-end, but Net Debt/EBITDA to remain below 1.0x.
• Funding tied up for ongoing projects.
Q 5 (Composite): What is the outlook for oncology and its share in revenue?
A (Management):
• Oncology currently 25-26% of hospital revenue; expected to rise as new facilities add radiation oncology.
• No signs of growth abating; share could move higher as new services come online.
Q 6 (Composite): What is the margin outlook and how should investors interpret margin trends?
A (Management):
• Margin % may fluctuate due to payor and clinical mix; focus should be on EBITDA per bed and ROCE.
• One-time Rs. 12 crores donation impacted Q1 margin; not expected to recur.
Q 7 (Composite): How are acquired hospitals (Lucknow, Nagpur, Noida, Dwarka) performing post-acquisition?
A (Management):
• Lucknow: Revenue up 97% YoY, EBITDA up 191% YoY.
• Nagpur: Revenue up 27% YoY, EBITDA up similar.
• Noida: Revenue up 14% YoY, EBITDA up 32% YoY; integration and equipment upgrades ongoing.
• Dwarka: Revenue up 24% QoQ, EBITDA up Rs. 7-8 crores QoQ; at capacity run-out status.
3 · Other Key Numbers
- Network gross revenue: Rs. 2,574 crores (Q1 FY26); Rs. 2,028 crores (Q1 FY25); Rs. 2,429 crores (Q4 FY25).
- Digital revenue: Rs. 744 crores (29% of total); website sessions: 69 lakh (up 61% YoY).
- International patient revenue: Rs. 208 crores (up 32% YoY).
- Network operating EBITDA: Rs. 613 crores; margin: 24.9%.
- Existing Units EBITDA margin: 26.2%; adjusted for one-time donation: 26.7%.
- Annualized EBITDA per bed: Rs. 68 lakhs (network); Rs. 75 lakhs (Existing Units, up 7% YoY).
- Profit after tax: Rs. 345 crores (Q1 FY26); Rs. 295 crores (Q1 FY25); Rs. 376 crores (Q4 FY25).
- Free cash flow: Rs. 389 crores.
- Capex deployed: Rs. 435 crores (expansion/upgrades); Rs. 131 crores (land for Vaishali).
- Net debt: Rs. 1,755 crores (vs. Rs. 1,576 crores at Mar’25).
- Free treatment provided: ~40,000 patients; value: Rs. 62 crores.
- Max@Home revenue: Rs. 60 crores (up 22% YoY); Max Lab revenue: Rs. 48 crores (up 19% YoY).
- New Units gross revenue: Rs. 231 crores; combined unit EBITDA (Dwarka & Noida): Rs. 32 crores.
- Occupied bed days: up 26% YoY, 4% QoQ.
- ARPOB: Rs. 78,000 (up 1% YoY/QoQ); Existing Units like-for-like ARPOB up 5% YoY, 2% QoQ.
- Occupancy: Network 76%; Existing Units 78%; base hospitals ~80%.
- Institutional business: share increased in new/expanding hospitals (e.g., Mohali, Mumbai, Nagpur, Lucknow).
- Divestment: Chitta and Anoopshahr hospitals for Rs. 40 crores (completion by Sep’25); Chitta Q1 revenue Rs. 5 crores, EBITDA loss Rs. 1 crore.
- One-time donation: Rs. 12 crores (Devki Devi Foundation).