Max Healthcare Institute Ltd (MAXHEALTH) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, you're connected to the earnings conference call for Max Healthcare Institute Limited. The call will begin shortly, please stay connected. Ladies and gentlemen, you're connected to the earnings conference call for Max Healthcare Institute Limited. This call will begin shortly, please stay connected. Thank you.
Moderator: Ladies and gentlemen, good day, and welcome to the Max Healthcare Institute Limited earnings conference call. Please note that this conference is being recorded. I now hand the conference over to Mr. Suraj from CDR India. Thank you, and over to you, Suraj.
Suraj (CDR India): Thank you, Raya. Good afternoon, everyone, and thank you for joining us on Max Healthcare's Q2 and H1 FY '27 earnings conference call. We have with us, Mr. Abhay Soi, Chairman and Managing Director; Mr. Yogesh Sareen, Group Director and Chief Financial Officer; and Mr. Keshav Gupta, Group Director - Growth, M&A, and Business Planning. We will begin the call with opening remarks from the management, following which, we will have the forum open for an interactive Q&A session. Before we start, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I would now like to invite Abhay to make his opening remarks. Thank you, and over to you, Abhay.
Abhay Soi (Max Healthcare Institute Ltd): A very good morning and thank you for joining us today for Max Healthcare's second quarter and first half of FY '27 earnings call. We gained momentum in the second quarter, with revenue growing by 20%, operating EBITDA by 18%, and PAT by 10%. Demand for quality healthcare remains strong across our hospital network, with occupancy holding steady at 77% despite a 14% year-on-year increase in operational bed capacity. Occupancy and revenue across all three brownfield expansions, namely Max Nanavati in Mumbai, Max Mohali, and Max Smart at Saket, Delhi have ramped up very well and in line with our expectations. At Max Smart, the newly commissioned 260 beds achieved EBITDA breakeven within 3 months of operations, being Q2, and are now witnessing high occupancy levels. However, the initial ramp-up of these beds did create a drag on EBITDA of Saket complex during Q2. Excluding the Saket complex, revenue grew by 20% and EBITDA by 25%. We expect to commission the remaining 140 beds after Diwali Puja. Encouraged by these quick ramp-ups, we continue to explore opportunities to add capacity at our existing hospitals. In this regard, the Board has approved an investment of INR 415 crores towards addition of 209 brownfield beds at Max Noida, Max Vaishali, and BLK-Max along with an MLCP, multilevel car park tower at BLK at the cost of approximately 85 crores. This is a part of the INR 415 crores. Most of this capacity is expected to become available over the next 18 to 24 months. During the quarter, 202 brownfield beds were added to the operational capacity, mainly at Max Smart, Max Lucknow, Max Noida, and Max Dwarka. Services have also commenced at the new oncology block at Max Dwarka, which will enable addition of around 20 beds to the hospital in Q3 FY '27. Following the rights issue by Kalinga Hospital Limited, our shareholding has increased to 66%. A new leadership team has taken charge of Max Bhubaneshwar, and clinical teams have been added across gastroenterology, GI surgery, neurosurgery, and orthopedics. The hospital reported a revenue of INR 38 crores and EBITDA of INR 4 crores for the quarter. We have commenced renovation of the facility, and the first part will start rolling out towards the end of the year. Now moving on to the Q2 performance highlights. Average occupancy for the network was 77%, similar to last year, despite a 14% increase in operational bed capacity. Occupied bed days were up by 13% year-on-year and 7% quarter-on-quarter. Average revenue per patient for the quarter stood at INR 2.31 lakhs, growing by 8% year-on-year. This growth was partly driven by a decline in institutional bed share to 29% from 34% last year. Network gross revenue stood at INR 3,219 crores compared to INR 2,692 crores in Q2 last year and INR 2,982 crores in the previous quarter. This reflects an increase of 20% year-on-year and 8% quarter-on-quarter.
Abhay Soi (Max Healthcare Institute Ltd): Due to the discontinuation of select high value chemotherapy drugs for institutional patients as a result of CGHS rate revisions last year, the share of oncology for impatient revenues dropped to 21% from 26% in Q2 FY26. Excluding oncology, gross revenue grew by 25% and an ARPP grew by 11% year on year. International patient revenue was Rs 307 crore, registering significant growth of 33% year-on-year and now accounts for 10% of healthcare revenue from hospitals. Digital revenue from online marketing activities, web-based appointments, and digital lead management was Rs 1,099 crore, accounting for approximately 34% of overall revenue. Website traffic crossed 1.14 crore sessions during the quarter, growing by 44% year on year. Operating EBITDA for the quarter stood at 820 crores versus 694 crores in Q2 FY26 and Rs 704 crore in the previous quarter, reflecting growth of 18% year-on-year and a significant growth of 16% quarter-on-quarter, while EBITDA per bed grew by 4% year on year to Rs 77 lakh per annum. Operating EBITDA margin was 26.8% similar to Q2 FY26 despite 14% increase in operational bed capacity, reflecting an improvement of around 200 basis points over the trailing quarter. Profit after tax for the network was Rs 448 crore against Rs 406 crore in Q2 last year normalized for one-time tax gain of Rs 149 crore and Rs 357 crore in the previous quarter, reflecting a growth of 10% year on year and 26% quarter on quarter. The network generated free cash flow of Rs 500 crore during the quarter, of which Rs 292 crore was invested in ongoing capacity expansion and projects, and Rs 195 crore was disbursed towards dividend. Net debt for the network stood at Rs 2,369 crore compared to 2,384 crores at the end of June 2026, while the net debt to EBITDA ratio continued to remain below one. Continuing our efforts to support local communities, we provided free treatment to over 57,000 patients from economically weaker sections of the society worth Rs 90 crore at hospital tariff, reflecting growth of 47% year-on-year. Both our strategic business units continue to deliver steady growth in revenue and profitability. Max@Home reported revenue of Rs 86 crore reflecting robust year-on-year growth of 37%. It offers 16 specialized service lines across 15 cities with over 56% repeat transactions. Max Lab reported revenue of Rs 66 crore, reflecting year-on-year growth of 24%. It provides services in over 60 cities and served over 7 lakh patients during the quarter. Now moving on to the status of our expansion projects coming on stream over the next few years. The balance 205 beds at Max Nanavati and Max Smart Saket Delhi will be opened post Diwali Puja. 100 beds at Max Lucknow in the existing 460 bed facility will be commissioned over the next two quarters. 85 beds at Max Noida will be commissioned by December 2027. 500 beds at Sector 56, Gurgaon, we expect to start phase commissioning of this facility by the end of this financial year. 250 beds at Bhubaneswar, renovation of existing facility is underway and we expect phase completion over the next 12 to 15 months, with the first part of the renovation being delivered by the end of this current calendar year. 100 beds at Max Nagpur, project work continues to be on track, and we expect commissioning by December 2027. 400 beds at Zirakpur, Mohali, project is on schedule and we expect commissioning it by December 2027. 200 beds at Pitampura, project is on track and we expect commissioning in FY29. 400 beds at Patparganj, we expect commissioning by end of FY29. 260 beds at Max Dwarka, we are putting up a new tower over there, brownfield, which is the next phase because Dwarka Hospital is running at full capacity, will be commissioned by FY30. 270 beds, additional beds at Max Nanavati in Phase II, project work has started and we will be commissioning it by FY30. 450 beds at Pune, we have received the IOD, project is expected to be commissioned by
Abhay Soi (Max Healthcare Institute Ltd): FY30. 200 beds at Max Vaishali, which is the new tower being created brownfield over there, project work is underway and we expect commissioning again by FY2030. 400 beds at Shaheed Path in Lucknow phase 1, we are waiting formal environmental clearance and building plans to commence construction activity at the site. We expect to commission by phase 1 FY30. And finally moving on to the overview of the company's performance for the first half of financial year 2027. Total bed capacity was around 6,200, a growth of 20% year-on-year. Network gross revenue stood at 6,200 crores reflecting growth of 18% year-on-year. Operating EBITDA stood at 1,524 crores, registering growth of 17% year-on-year, while operating EBITDA per bed grew by 4% year-on-year to rupees 74 lakhs. Operating EBITDA margin was 25.9%, similar to H1 FY26. This is despite total bed capacity increasing by 20% year-on-year. Profit after tax for the network was rupees 805 crores against 750 crores last year, normalized for one-time tax gain of 149 crores, reflecting a growth of 7% year-on-year. In the first half, we generated rupees 897 crores of free cash flow from operations. After interest, tax, working capital changes, and routine capex, 629 crores was deployed towards ongoing expansion projects and facility upgrades at new units. Rupees 308 crores was spent towards the acquisition of Kalinga Hospital Limited, Bhubaneswar and Alexis Properties Private Limited, Pune, and rupees 195 crores was distributed as dividend. With this, we open the floor for any questions you may have.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Tausif from BNP Paribas. Please go ahead.
Tausif (BNP Paribas): Good afternoon and thanks for the opportunity. My first question is related to disempanelment of hospital mentioned in the footnote. Can you tell us how many hospital has been disempanelment and which are the ones, and do you further plan to increase the numbers and what was the rationale behind this?
Abhay Soi (Max Healthcare Institute Ltd): So we disempanelled BLK, you know, in May and then for CGHS and then we did, you know, railways etc. because they were not paying us. And then also ECHS at Shalimar Bagh. So these are the ones that we've disempanelled. But I think as we feel pressure on the on the, you know, CTi business, so we'll have to take the call at a hospital level, right? I think it's a normal trajectory. The more sort of mature hospitals or older hospitals, you see them disempanelling, and distilling the pay mix whilst the newer hospitals, you empanel them and you take on more institutional business.
Tausif (BNP Paribas): Just want to understand, are these decisions taken voluntarily overnight by any hospitals? And would you seek empanelment of the upcoming Gurugram hospital for CGHS and ECHS?
Abhay Soi (Max Healthcare Institute Ltd): Yes, we will seek of the new hospital, and you know like I said, of the older hospital, you de-empanel. For example, most of the hospital which you're going for brownfield, they do you know, close to no institutional business, and once that brownfield new capacity comes in, you start empanelling, and you start doing institutional business as well.
139 more turns of this transcript: log in to Stocksigma to read the full call.