Healthcare Services
Max Healthcare Institute is a prominent hospital company based in Gurugram, India, operating under the stock ticker MAXHEALTH.
With a market capitalization of Rs. 95,341.8 Crores, the company offers a wide range of medical and healthcare services across various specialties. These include advanced cardiac care, orthopaedics, oncology, renal sciences, neurosciences, minimal access metabolic and bariatric surgery, obstetrics, gynaecology, paediatrics, nephrology, general surgery, and specialized transplants such as liver, heart, kidney, lung, and bone marrow.
In addition to its hospital services, Max Healthcare Institute provides innovative health and wellness solutions through platforms like Max@Home, which offers at-home healthcare, and MaxLab, which delivers diagnostic services beyond its network of hospitals via third-party laboratory management.
The company boasts a strong financial performance, reporting a trailing 12-month revenue of Rs. 6,695.7 Crores and a profit of Rs. 1,008.4 Crores over the past four quarters. Max Healthcare has experienced significant growth, with a revenue increase of 70.4% in the past three years.
For its investors, Max Healthcare distributes dividends, currently yielding 0.25% annually, with a reported Rs. 2.5 dividend per share in the last 12 months. However, it’s worth noting that the company has diluted its shareholders by 0.3% over the past three years. Established in 2001, Max Healthcare continues to expand its network of healthcare facilities, including hospitals and medical centers, contributing to its reputation as a leading healthcare provider in India.
Summary of Max Healthcare Institute's latest earnings call, featuring management's outlook on business performance, financial results, and analyst Q&A sessions that highlight key strategic initiatives and market challenges.
Last updated: Feb 25
Management Outlook:
Max Healthcare's management expressed strong confidence in continued growth, driven by strategic expansions, operational efficiency, and successful integration of acquisitions. Key highlights include:
Growth Momentum: Achieved 30% YoY growth in revenue, EBITDA, and occupied bed days. New hospitals (Dwarka, Lucknow, Nagpur) and acquisitions (Jaypee Noida) are contributing positively, with Dwarka reaching EBITDA breakeven in 6 months.
Expansion Strategy: Focus on asset-light, "built-to-suit" models (Thane, Mohali) to maximize ROCE. Capacity expansions (500 beds in Thane by 2028, 400 beds in Mohali) and brownfield projects (Nanavati, Max Smart, Gurgaon) are on track, adding ~1,300 beds over 12 months.
Operational Efficiency: Existing units saw 7% YoY ARPOB growth and improved EBITDA margins (28.6%). Annualized EBITDA per bed rose to Rs.73 lakhs, with new units expected to enhance profitability as capacity scales.
Financial Discipline: Net debt at Rs.1,608 crores (0.65x EBITDA), maintaining a conservative cap of 2.5x. Strong free cash flow (Rs.303 crores in Q3) supports growth and dividends.
Market Optimism: Anticipated price revisions in institutional segments (CGHS/PSUs) and resilience in international patient revenue (+28% YoY despite geopolitical challenges).
Therapy Mix & Innovation: Focus on expanding high-margin services (oncology, robotics) and digital initiatives (Max@Home, Max Lab) to diversify revenue.
Key Forward-Looking Points:
Management remains bullish on inorganic opportunities and market share gains, underpinned by robust demand and execution capabilities.
Last updated: Feb 25
1. Question: Why did existing units' revenue remain flat quarter-on-quarter despite Q3 typically being a weak season?
Answer: Q3's flat revenue was due to higher-than-expected occupancy during Diwali (unlike typical seasonal drops). Festive impacts were mitigated by timing (Diwali at month-end) and operational efficiency. Year-on-year growth, not sequential trends, better reflects performance.
2. Question: Are price hikes expected for insurance schemes?
Answer: No insurance-specific price hikes are anticipated. Institutional rate revisions (e.g., CGHS) are expected soon. Insurance rate adjustments occur organically during contract renewals, maintaining ~6% annual medical inflation.
3. Question: How is Lucknow's market evolving, and what drives future profitability?
Answer: Lucknow's strong demand justifies adding 140 beds (64 in Jan/Feb 2025). A new radiation bunker (July 2025) will boost oncology revenue. Market competition remains unchanged (Apollo, Medanta), with growth driven by capacity expansion and clinical programs.
4. Question: Why did Nagpur's EBITDA decline quarter-on-quarter?
Answer: Seasonality (vector-borne diseases in Q2 caused temporary spikes) and Q3's 79% occupancy (still healthy). Year-on-year growth (22% revenue, 50% EBITDA) reflects strong performance. Future expansion (127 beds post-clearance) targets higher ROCE.
5. Question: How will upcoming projects be funded, and what is the debt tolerance?
Answer: Net debt-to-EBITDA is capped at 2.5x (currently 0.65x post-Jaypee). Asset-light models (Thane, Mohali) minimize capital outlay. Annual free cash flow (~Rs.1,200 crore) and conservative leverage support expansion.
6. Question: What is the impact of institutional bed share (~30%) on margins?
Answer: Institutional beds optimize idle capacity, boosting fixed-cost absorption. Margins benefit from operational leverage, especially in brownfields. Preference remains for higher-margin segments, but institutional revenue aids EBITDA growth during expansions.
7. Question: How will asset-light hospitals (e.g., Thane) affect margins?
Answer: Asset-light models prioritize ROCE (100%+ post-stabilization) over EBITDA margins. Rent costs (post-EBITDA) reduce margins by ~5-6% vs. owned assets, but lower capital risk and developer-funded construction enhance returns.
8. Question: What are the risks from IRDAI's senior citizen insurance cap?
Answer: Minimal impact. Insurers' permitted 10% annual premium hikes exceed hospitals' negotiated ~6% rate increases. Policies retain affordability, sustaining patient volume. No direct rate negotiations with hospitals are anticipated.
9. Question: How will Mumbai's expansion impact beds and margins?
Answer: Phase 1 adds 268 beds (no net reduction). Phase 2 replaces 160 outdated ward beds with premium beds, improving ARPOB. Margins rise via operating leverage and right-sized capacity, aligning with demand for single/deluxe rooms.
10. Question: Why did PHF profitability decline?
Answer: PHFs upstreamed higher fees to Max Healthcare (Rs.25 crore annual impact). Balaji/DDF donations to other trusts reduced reported EBITDA but align with tax-exempt objectives. No dividend risk; surplus cash supports group projects.
Buy Backs: Company has bought back it's stock in the past which is a good thing.
Size: It is among the top 200 market size companies of india.
Technicals: Bullish SharesGuru indicator.
Smart Money: Smart money has been increasing their position in the stock.
Profitability: Recent profitability of 15% is a good sign.
Balance Sheet: Strong Balance Sheet.
Growth: Awesome revenue growth! Revenue grew 24.7% over last year and 70.4% in last three years on TTM basis.
Momentum: Stock is suffering a negative price momentum. Stock is down -4.9% in last 30 days.
Comprehensive comparison against sector averages
MAXHEALTH metrics compared to Healthcare
Category | MAXHEALTH | Healthcare |
---|---|---|
PE | 102.90 | 37.86 |
PS | 15.50 | 6.83 |
Growth | 24.7 % | -1.3 % |
MAXHEALTH vs Healthcare (2021 - 2025)
Understand Max Healthcare Institute ownership landscape with insights into key distribution patterns, offering investors a clear view of stakeholder dynamics.
Shareholder Name | Holding % |
---|---|
Abhay Soi | 23.73% |
Government of Singapore | 5.69% |
New World Fund Inc | 5.33% |
Smallcap World Fund, Inc | 3.55% |
HDFC Mutual Fund | 1.76% |
SBI Mutual Fund | 1.74% |
Monetary Authority of Singapore | 1.49% |
Motilal Oswal Mutual Fund | 1.36% |
Canara Robeco Mutual Fund | 1.28% |
Vanguard Total International Stock Index Fund | 1.08% |
Kotak Mutual Fund | 1.08% |
Kotak Funds - India Midcap Fund | 1.06% |
Axis Mutual Fund | 1.02% |
Unclaimed or Suspense or Escrow Account | 0.13% |
Aditya Soi | 0.01% |
Distribution across major stakeholders
Distribution across major institutional holders
Investor Care | |
---|---|
Dividend Yield | 0.26% |
Dividend/Share (TTM) | 2.5 |
Shares Dilution (1Y) | 0.03% |
Diluted EPS (TTM) | 10.31 |
Financial Health | |
---|---|
Current Ratio | 1.26 |
Debt/Equity | 0.2 |
Debt/Cashflow | 0.86 |
Detailed comparison of Max Healthcare Institute against industry peers, highlighting key financial metrics, valuation ratios, and performance indicators to provide competitive context within the sector.
Ticker | Name | Mkt Cap | Revenue | Price %, 1M | Returns, 1Y | P/E | P/S | Rev 1-Yr | Inc 1-Yr |
---|---|---|---|---|---|---|---|---|---|
APOLLOHOSP | Apollo Hospitals EnterprisesHospital | 1.01 LCr | 21.31 kCr | +6.39% | +8.65% | 75.09 | 4.75 | +15.13% | +64.06% |
FORTIS | Fortis HealthcareHospital | 50.97 kCr | 7.62 kCr | +1.39% | +47.16% | 61.83 | 6.69 | +12.17% | +42.06% |
NH | Narayana HrudayalayaHospital | 36.75 kCr | 5.48 kCr | +9.70% | +41.17% | 46.87 | 6.71 | +8.88% | +1.56% |
MEDANTA | Global HealthHospital | 32.26 kCr | 3.65 kCr | -0.46% | -15.57% | 63.6 | 8.83 | +12.56% | +12.29% |
KIMS | Krishna Institute of Medical SciencesHospital | 26.86 kCr | 2.9 kCr | +10.06% | +66.93% | 70.7 | 9.25 | +18.28% | +4.60% |
SHALBY | ShalbyHospital | 2.04 kCr | 1.09 kCr | -2.59% | -33.45% | 67.83 | 1.87 | +19.89% | -62.94% |
Valuation | |
---|---|
Market Cap | 1.07 LCr |
Price/Earnings (Trailing) | 106.02 |
Price/Sales (Trailing) | 15.97 |
EV/EBITDA | 59.43 |
Price/Free Cashflow | 283.88 |
MarketCap/EBT | 79.81 |
Fundamentals | |
---|---|
Revenue (TTM) | 6.7 kCr |
Rev. Growth (Yr) | 37.7% |
Rev. Growth (Qtr) | 8.77% |
Earnings (TTM) | 1.01 kCr |
Earnings Growth (Yr) | -17.47% |
Earnings Growth (Qtr) | -15.26% |
Profitability | |
---|---|
Operating Margin | 21.11% |
EBT Margin | 20.01% |
Return on Equity | 11.46% |
Return on Assets | 7.68% |
Free Cashflow Yield | 0.35% |