MAXHEALTH - Max Healthcare Institute Limited Share Price

Max Healthcare's management provided a positive outlook for Q1 FY '26, reporting a robust year-on-year revenue growth of 27% and operating EBITDA growth of 23%. They emphasized the successful integration of recent hospital acquisitions as a key driver of performance.

Looking forward, the company plans to augment its bed capacity significantly, with approximately 1,000 brownfield and 500 greenfield beds expected to be commissioned throughout the year. Specific highlights include:

• A new 130-bed hospital in Dehradun has been approved, focusing on advanced oncology services.
• The quarterly average occupancy for the network improved to 76%, with existing units achieving over 78% occupancy.
• Average revenue per occupied bed was Rs. 78,000, a nominal increase of 1% year-on-year.
• Network gross revenue reached Rs. 2,574 crores, while international patient revenue rose to Rs. 208 crores, marking a growth of 32% year-on-year.
• The company reported a profit after tax of Rs. 345 crores, up by 17% from the previous year.

Financially, free cash flows stood at Rs. 389 crores, with net debt increasing to Rs. 1,755 crores, an increase attributed to ongoing capacity expansion projects. The management also mentioned that EBITDA per bed for the network was Rs. 68 lakhs, with a like-for-like figure of Rs. 75 lakhs for existing units.

The management indicated expectations of the net debt-to-EBITDA ratio remaining below 1.0x by the end of FY '26, despite a projected increase in net debt of Rs. 400-500 crores. They anticipate smooth growth in occupancy and revenue as new capacities are commissioned, ensuring sustained operational metrics moving forward.

Q&A Section of Earnings Call Transcript (August 14, 2025)

1. Question: "If I exclude these additional operational beds...how has the remaining beds' performance been?"
   Answer: "Excluding new facilities like Dwarka and Jaypee, the revenue growth stands at 16%. For the base units, revenue grew by 13%, and ARPOB grew by 7% year-on-year."

2. Question: "Which all other geographies have you engaged for the international patient flow?"
   Answer: "We've opened direct-to-fly offices in various countries, broadening our international marketing efforts to increase patient traction effectively."

3. Question: "What's your expectation for net debt at the end of FY '26?"
   Answer: "We anticipate an increase in net debt by around Rs. 400-500 crores by the end of FY '26, potentially leading to a net debt-to-EBITDA ratio of less than 1.0x."

4. Question: "What is the expected growth in the oncology segment?"
   Answer: "With upcoming services like radiation oncology in new hospitals, we believe our oncology share can exceed 30% over the next few years as demand continues to grow."

5. Question: "How will you onboard doctors for new hospitals?"
   Answer: "We've hired needed clinicians in advance for our new units. Gradually, as we open more beds, we'll add more staff to ensure smooth operations without major disruptions."

6. Question: "Will direct costs remain stable, or will they inflow more?"
   Answer: "Direct costs will primarily reflect manpower inflation. We expect costs to normalize as we ramp up revenues from new capacities in the coming weeks."

7. Question: "How has Noida Hospital been performing post-acquisition?"
   Answer: "Noida's revenue has grown by 14% year-on-year, and EBITDA has increased by 32%. The integration has faced some operational challenges, but we expect better performance moving forward."

8. Question: "When will the new block at Nanavati be fully operational?"
   Answer: "The Nanavati facility should be fully operational, including all beds and operation theatres, by October-November 2025, as we ramp up services in phases."

9. Question: "What should we expect regarding EBITDA margin improvements in FY '26?"
   Answer: "We do expect improvements in EBITDA margins, but focus on EBITDA per bed instead, since our strategy is to enhance margin while managing varying revenue streams effectively."