Max Healthcare Institute Limited — Q4 FY25 earnings call

Call held 27 May 2025

Management summary

Max Healthcare delivered a strong Q4 and full year FY25 performance, marked by significant revenue and EBITDA growth driven by successful acquisitions and disciplined execution. The company achieved rapid breakeven for Max Dwarka and is aggressively expanding its bed capacity with approximately 1,500 new beds expected by year-end. While new units initially show lower profitability metrics, management is confident in future margin expansion through higher-end medical programs and increased occupancy.

Highlights

  • Network gross revenue for Q4 FY25 increased 29% year-on-year to INR 2,429 crore, reflecting strong top-line growth.

  • Network operating EBITDA for Q4 FY25 stood at INR 632 crore, a 26% year-on-year growth, with a margin of 27.2%.

  • Max Dwarka, a newly operationalized asset-light hospital, achieved EBITDA breakeven in a record 6 months and exited Q4 with 73% occupancy on 235 beds.

  • Max Lucknow demonstrated exceptional growth with 56% YoY revenue and 102% EBITDA growth, while Max Nagpur reported 23% YoY revenue and 86% EBITDA growth in their first year.

  • The company is on track to commission approximately 1,500 new beds by the end of this year through brownfield and greenfield expansions.

Concerns

  • Institutional ARPOB degrew by 3-4% quarter-on-quarter, though management stated this was temporary.

  • Geopolitical unrest in regions like Bangladesh and Yemen led to contraction in international patient footfalls, despite overall growth.

  • EBITDA per bed for New Units is currently 43% of the rest of the network, indicating a drag on overall average profitability metrics initially.

Key financials

  1. Network Gross Revenue ₹2,429 Cr +29%YoY
  2. Network Operating EBITDA ₹632 Cr +26%YoY
  3. Network Operating EBITDA Margin 27.2%
  4. PAT (excl. exceptional) ₹376 Cr +21%YoY
  5. Network Occupancy 75%
  6. Network ARPOB ₹77,100 0%YoY

What they filed

Q1 FY27: revenue up 16.7%, net profit up 4.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,707 1,868 1,910 2,028 2,135 +25%2,068 +11%2,143 +12%2,366 +17%
EBITDA451 499 512 523 575 +27%538 +8%606 +18%598 +14%
Net profit282 239 319 308 491 +74%301 +26%342 +7%323 +5%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • New Units (Q4 FY25)
    ₹353 Cr Gross Revenue₹67 Cr EBITDA Contribution19.4% EBITDA Margin
  • Existing Units (Q4 FY25)
    12% Revenue Growth28.5% EBITDA Margin7% ARPOB Growth₹84 lakh EBITDA per bed
  • Max@Home
    ₹56 Cr Top Line22% Growth
  • Max Lab
    ₹46 Cr Revenue19% Growth

Capital allocation

high confidence
  • Capex ₹390 Cr mostly through internal accruals
    • Ongoing capacity expansion projects and upgradation of facilities at acquired hospitals ₹390 Cr
    During the quarter, INR 390 crore was deployed towards ongoing capacity expansion projects and upgradation of facilities at acquired hospitals.
  • Debt Net ₹1,576 Cr · 2.5× EBITDA Cost 8%
    Consequently, net debt for the Network came down by INR 32 crore to INR 1,576 crore at the end of March '25. ...we can get money at 8-8.25%... we have guided that we are happy going up to 2.5x net debt to EBITDA.
  • Returns FYTD ₹146 Cr
  • M&A Jaypee Hospital Acquisition · Closed · Consideration ₹[object Object] (cash)

    Part of asset-light expansion strategy, adding 500 beds in Delhi NCR.

    Contributed to New Units revenue and EBITDA; integration ongoing.

    we acquired the 500-bed marquee Jaypee Hospital in Delhi NCR this year. ...INR 1,716 crore (net of cash at Jaypee Healthcare Limited) was used for the Jaypee acquisition.
  • M&A Alps Hospital Limited and Max Hospitals & Allied Services Limited Merger · Closed

    Simplify holding structure, improve governance and optimize cash flows.

    we have concluded merger of two wholly-owned subsidiaries Alps Hospital Limited and Max Hospitals & Allied Services Limited.
  • M&A Crosslay Remedies Limited and Jaypee Healthcare Limited Merger · Pending regulatory · Consideration ₹[object Object] (undisclosed)

    Simplify holding structure, improve governance and optimize cash flows, reduce acquisition outflow.

    Will reduce outflow on the acquisition by INR 200-225 crore.

    We have also filed an application with the NCLT for merger of Crosslay Remedies Limited and Jaypee Healthcare Limited, which will, in effect, reduce our outflow on the acquisition by INR 200-225 crore.
  • M&A Land parcel adjoining Max Vaishali Acquisition · Announced

    Long-term growth plan, adjoining fully occupied 400-bed hospital.

    Will enable 140 beds brownfield project.

    including the announcement made last week regarding acquisition of approximately 1 acre land parcel, adjoining our fully occupied 400-bed hospital in Vaishali.
  • Liquidity Liquidity disclosed Free cash flows from operations (after interest, tax, WC changes, routine capex) were INR 1,447 crore for FY25, providing ample funding for expansion.
    During the full year, we generated INR 1,447 crore of free cash flows from operations after interest, tax, working capital changes and routine capex.

Guidance & targets

Capacity

  • Nanavati Phase I beds commissioning Capacity · within 90 days · High confidence 268 beds
    268 beds at Nanavati in Phase I: Interior work is in progress and we expect to commission this facility within 90 days.

    — Abhay Soi

  • Mohali new beds commissioning Capacity · within 90 days · High confidence 155 beds
    155 beds at Mohali: Finishing work is underway and we expect to commission this facility within 90 days as well.

    — Abhay Soi

  • Max Smart (Saket Complex) commissioning Capacity · by Q2 FY'26 · High confidence 400 beds
    400 beds at Max Smart (Saket Complex): Interior and MEP-fit-out works are ongoing. We expect to commission this facility latest by Q2 FY '26.

    — Abhay Soi

  • Sector 56 Gurgaon commissioning Capacity · by end of this calendar year · High confidence 500 beds
    500 beds at Sector 56 Gurgaon: Structural work is in progress. We expect to commission the facility by end of this calendar year.

    — Abhay Soi

  • Dwarka Onco block commissioning Capacity · by Q3 this year · High confidence —
    At Dwarka: The onco block is expected to be commissioned by Q3 this year.

    — Abhay Soi

  • Total new beds Capacity · by the end of this year · High confidence approximately 1,500 beds
    adding approximately 1,500 beds in total.

    — Abhay Soi

  • Max Nagpur project completion Capacity · within 24 months · High confidence 127 beds
    We expect to complete this project within 24 months.

    — Abhay Soi

  • Max Vikrant (Saket Complex) project completion Capacity · by 2028 · High confidence 550 beds
    We expect to complete the project by 2028.

    — Abhay Soi

  • Zirakpur (Mohali) project completion Capacity · within 30 months · High confidence 400 beds
    The project is expected to be completed within the next 30 months.

    — Abhay Soi

  • Vaishali brownfield project completion Capacity · within 30 months · High confidence 140 beds
    We expect to complete this brownfield project in the next 30 months as well.

    — Abhay Soi

  • Total beds Capacity · by 2028 · Medium confidence 9,000 beds
    So today, we are guiding you that by 2028, we may have 9,000 beds, but I am pretty sure one year down the line, that number would have moved up.

    — Abhay Soi

Debt

  • Net debt to EBITDA ratio Debt · High confidence 2.5x
    we have guided that we are happy going up to 2.5x net debt to EBITDA.

    — Abhay Soi

Profitability

  • ROCE for M&A Profitability · within 4-5 years · High confidence 20-25%
    One is the 20-25% ROCE within 4 to 5 years, and in markets where we have at least 1 or 2 of our peers.

    — Abhay Soi

What to watch in Q1 FY26

Nanavati Phase I Commissioning

within 90 days (Q1 FY26)
Current Interior work in progress
Target Commissioned (268 beds)

Why it matters

Adds significant capacity to the network and contributes to revenue growth.

268 beds at Nanavati in Phase I: Interior work is in progress and we expect to commission this facility within 90 days.

Risks & concerns

  • Geopolitical unrest impacting international patient footfalls

    medium

    Contraction in patient footfalls from Bangladesh and Yemen due to continuing political unrest, and recent Pakistan airspace closure, despite overall 28% YoY growth in international patient revenue.

    Management acknowledged

  • Initial lower profitability metrics from new units

    low

    EBITDA per bed for New Units is 43% of the rest of the network, and institutional ARPOB degrew 3-4% QoQ, potentially impacting overall average metrics in the short term.

    Management acknowledged

  • Competition from new hospitals in key markets

    low

    A peer is opening a new hospital in Gurgaon with a similar number of beds and premium location, but management is confident due to Max Healthcare's strong network and performance.

    Analyst downplayed

Q&A highlights

6 direct, 1 evasive
Profitability and Margin Expansion Potential of Acquired Units Direct
Significant. This is only the first year of acquisition. By the time you put the building blocks in place, which you must appreciate takes some time. Just to give you an example, in Lucknow, you had expansion of EBITDA by 102%, yet, there is no radiation oncology there. There is no bunker. And that bunker is going to come into play at the end of H1 this year.

Clarifies the significant upside potential for margin improvement in newly acquired assets like Lucknow, Nagpur, and Noida, driven by strategic investments and operational enhancements over the next 1-2 years.

Asked by Amey Chalke

Payor Mix Strategy for New Hospitals and Occupancy Ramp-up Direct
Typically, when you open a new hospital, Dwarka, for example, you kind of fill it up with all payor groups, because the first focus is to get the occupancy up and then you start churning it. ... If I look at Nagpur, for example, it was operating at 50-odd percent occupancy prior to acquisition, but we took up institutional business over there in order to ramp up the occupancy and the occupancy now is almost full up.

Explains the strategic use of institutional patients to quickly fill idle capacity and cover fixed costs in new or underutilized hospitals, with a clear threshold (up to 80% occupancy) before optimizing for higher-ARPOB patients.

Asked by Damayanti Kerai

Interpretation of Network ARPOB with Mixed Asset Portfolio Direct
It's irrelevant what the overall ARPOB is. Today, if we acquire something for $100 and it gives us $25 of EBIT, it's a 25% ROCE. We do not worry about what it is producing is lower ARPOB or higher ARPOB. What we have to look at is what is happening to overall EBITDA and EBITDA per bed, what is happening to ROCE vis-a -vis what we are deploying.

Provides management's perspective on evaluating acquisitions based on ROCE and overall EBITDA metrics rather than solely on average ARPOB, especially when integrating lower ARPOB assets that still offer high returns.

Asked by Damayanti Kerai

Dwarka Hospital's Profitability Post-Breakeven Direct
No, there is no loss. After breakeven, we have not made a loss. It's obviously lower profit. It's not as if in we broke even in December and then January, February or March, any of the months that we have lost money, we have not. Since then, till date, we have not lost money. Only occupancy has moved up. Your flow through to the bottom line has improved since then.

Clarifies that Max Dwarka has been consistently profitable since achieving breakeven in December, addressing analyst's concern about potential Q4 losses and highlighting improving operational efficiency.

Asked by Neha Manpuria

Pace of Greenfield vs. Brownfield Capacity Ramp-up Direct
Well, you can think of it like that, but the only difference is that in a greenfield, you take 6 months to break even. By the time you get to 75% occupancy, it probably takes you a year. In a brownfield, you do it almost in a few months. Like in couple of months, you would just be ramping up capacity. Your take-up is much faster.

Distinguishes the ramp-up timelines and operational characteristics between greenfield and brownfield expansions, indicating faster monetization for brownfield projects.

Asked by Prashant Nair

Impact of Competitor's New Gurgaon Hospital Evasive
No. We are not seeing any impact of this. We have a very large network in Delhi NCR. Like I said, we have got 14 facilities. Today, in terms of number of locations, we have twice the number of locations that our next three peers have put together. ... In terms of brand, it's much bigger. And like I said, today we have many facilities in Delhi NCR but the performance of each of them is far better than the flagship of any other hospital chain that you heard of over there, in terms of occupancy, ARPOB, EBITDA per bed, etc.

Management confidently dismisses concerns about new competition in Gurgaon, citing Max Healthcare's dominant network, brand strength, and superior operational performance in the Delhi NCR region.

Asked by Rajit Aggarwal

Nanavati Redevelopment and Revenue Impact Direct
No, we are not demolishing 260 beds, we are demolishing 160 beds. Also, of these 160 beds, a large amount of them are the ones which are not occupied. We are adding 268 right now. For a period of 2 years, these 160 will not be available and then we come back with another 270 beds or so.

Clarifies the scope and timeline of the Nanavati redevelopment, specifying the number of beds to be demolished (160, mostly unoccupied) and the phased addition of new capacity, mitigating concerns about significant revenue loss.

Asked by Rishi Mody

2 min read 6 chapters

Detailed narrative

Robust Q4 and Full Year FY25 Financial Performance

Max Healthcare reported strong financial results for Q4 FY25, with network gross revenue growing 29% YoY to INR 2,429 crore and operating EBITDA increasing 26% YoY to INR 632 crore, achieving a margin of 27.2%. For the full fiscal year, network gross revenue reached INR 9,065 crore, a 26% YoY increase, and overall network operating EBITDA grew 22% YoY to INR 2,319 crore, with a margin of 26.8%. PAT, excluding exceptional items and one-off tax gains, grew 21% YoY to INR 376 crore in Q4.

Acquired Assets Performance & Strategy

Recent acquisitions played a key role in growth, with Max Lucknow demonstrating 56% YoY revenue growth and 102% EBITDA growth, and Max Nagpur reporting 23% YoY revenue and 86% EBITDA growth in their first year. Max Noida, acquired in November '24, contributed INR 228 crore in gross revenue and INR 48 crore in operating EBITDA with a 21% margin. Management expects significant margin expansion from these units as they mature and introduce higher-end medical programs, such as radiation oncology in Lucknow by H1 FY26.

Max Dwarka's Rapid Breakeven and Expansion Plans

The newly operationalized Max Dwarka hospital achieved EBITDA breakeven in a record 6 months. It exited Q4 FY25 with approximately INR 30 crore in monthly revenue and 73% occupancy on 235 beds. The company plans to open the remaining 68 beds soon and commission the Onco block by Q3 this year, further enhancing its capacity and service offerings.

Aggressive Capacity Expansion Pipeline

Max Healthcare is on track to add approximately 1,500 beds by the end of this calendar year through a mix of brownfield and greenfield projects. Key upcoming commissions include 268 beds at Nanavati Phase I and 155 beds at Mohali within 90 days, 400 beds at Max Smart (Saket Complex) by Q2 FY26, and 500 beds at Sector 56 Gurgaon by the end of the calendar year. Additionally, projects in Max Nagpur, Patparganj, Max Vikrant, Zirakpur, and Vaishali are progressing with timelines ranging from 24 to 30 months.

Strategic Capital Allocation and Debt Management

The company deployed INR 390 crore in Q4 FY25 and INR 1,182 crore for the full year towards capacity expansion and upgradation. Net debt decreased by INR 32 crore to INR 1,576 crore at the end of March '25. Management is comfortable with a net debt to EBITDA ratio of up to 2.5x and aims for a 20-25% ROCE on M&A, noting that FY25 ROCE was 26% overall. INR 1,447 crore in free cash flows from operations for FY25 supports these growth initiatives.

Resilient International Patient Business and SBU Growth

International patient revenue grew 28% YoY to INR 202 crore in Q4, despite geopolitical challenges impacting footfalls from Bangladesh and Yemen. The company's strategic business units also demonstrated strong growth, with Max@Home reporting a 22% YoY increase in top line to INR 56 crore, and Max Lab achieving 19% YoY revenue growth to INR 46 crore, expanding its presence across 50 cities.

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