Medi Assist Healthcare Services Limited — Q1 FY26 earnings call

Call held 7 Aug 2025

Management summary

Medi Assist reported a strong Q1 FY26, driven by robust premium under management growth of 18.5% YoY and significant market share gains. The company demonstrated improved profitability with operating EBITDA margin at 22.0% and PAT margin at 11.4%. Strategic initiatives like the Paramount acquisition and increased focus on technology-led services, including AI/ML for fraud detection, are key drivers for future growth and efficiency, despite some softness in group business same-store growth.

Highlights

  • Total premium under management grew 18.5% YoY to ₹7,076 crores as of June 30, 2025.

  • Operating revenue (excluding other income) was ₹190.6 crores, a growth of 13.6% YoY.

  • Operating EBITDA stood at ₹42 crores, up 19.3% YoY, with a margin of 22.0% of operating revenue.

  • PAT for the quarter was ₹22.6 crores, a growth of 15.7% YoY, representing an 11.4% margin.

  • Fraud, waste, and abuse savings improved 3x YoY to ₹160 crores in Q1 FY26 from ₹50 crores in Q1 last year.

  • Total market share increased to 23.1% (June 2025) from 21.3% (June 2024).

  • Paramount Health Services acquisition closed on July 1st, expected to add over ₹140 crores/year in revenue.

  • Technology services contributed 2.5% to operating revenue, with expectations for higher gross margins.

Key financials

  1. Total Premium Under Management ₹7,076 Cr +18.5%YoY
  2. Total Income ₹198 Cr +14.5%YoY
  3. Operating Revenue ₹190.6 Cr +13.6%YoY
  4. Operating EBITDA ₹42 Cr +19.3%YoY
  5. Operating EBITDA Margin 22%
  6. PAT ₹22.6 Cr +15.7%YoY
  7. PAT Margin 11.4%

What they filed

Q1 FY27: revenue up 34.1%, net profit up 62.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue39 34 43 44 61 +56%57 +68%64 +49%59 +34%
EBITDA17 7 20 14 25 +47%18 +157%24 +20%17 +21%
Net profit10 4 11 8 18 +80%12 +200%14 +27%13 +63%
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

  • Group Business
    20.4% Premium Growth33.2% Market Share93.4% Retention20% Private & SAHI Premium Growth
  • Retail Business
    0.2% Premium Growth5% Market Share89% Private & SAHI Premium Growth
  • International Benefits (Mayfair)
    35.6% Revenue Growth
  • Government Business
    11.1% Revenue Contribution
  • Technology Services
    2.5% Revenue Contribution

Guidance & targets

Margin

  • Steady State TPA Business Margin Margin · medium term · High confidence 23%-24%
    We believe our steady state margin in the TPA business should be at 23%-24%.

    — Satish Gidugu, CEO & Whole-Time Director

  • Paramount Consolidation Impact on Margins Margin · 5 to 6 quarters · Medium confidence 200-250 basis points
    with sort of paramount consolidation coming in, for about 5 to 6 quarters, we will probably see about 200-250 basis points kind of an impact on the consolidated margins.

    — Satish Gidugu, CEO & Whole-Time Director

  • Consolidated Base Margin Target Margin · future · Medium confidence 23%
    And then the consolidated base, getting it back to the 23% will be our focus.

    — Satish Gidugu, CEO & Whole-Time Director

Profitability

  • Technology Services Margins Profitability · future · High confidence better than core margins
    Of course, we expect these margins to be better than the core margins. Absolutely.

    — Satish Gidugu, CEO & Whole-Time Director

Growth

  • Overall Growth Rate Growth · future · Medium confidence industry rate or faster
    we have generally always said that we will grow at the industry rate or faster.

    — Niraj Didwania, Senior Vice President, Strategy

Revenue

  • Paramount Annual Revenue Revenue · a year · High confidence over ₹140 crores
    we expect a little over Rs. 140 crores a year in the IndAS format to sort of accrue from what we have as numbers.

    — Satish Gidugu, CEO & Whole-Time Director

Risks & concerns

  • Softness in Group Business Same-Store Growth

    medium

    Historically, 50% of same-store growth came from lives/employment growth, which is currently softer, though benefits expansion and higher opt-ins are compensating.

    Management acknowledged

  • Impact of IT/ITeS Sector Slowdown on Group Business

    medium

    Analyst raised concern about slowdown in job hiring in IT/ITeS; management stated diversification across industries and compensating factors like benefits expansion.

    Analyst acknowledged

Q&A highlights

3 direct
Retail Premium Growth and Core TPA Revenue Lag Direct
So, part of the slow growth is partly the seasonality and the reallocation of the underlying portfolios. But if you notice today, the private and SAHI premiums in our retail premiums are already at 42%. And that's an area where we have made significant gains since the same period last year, with almost 99% growth.

Analyst questioned the slow retail growth and the lag between premium and core TPA revenue growth, which management attributed to seasonality, portfolio reallocation, and a shift towards technology-led services in retail.

Asked by Chintan Sheth

Paramount Acquisition Revenue Contribution and Integration Direct
Paramount is 100% wholly owned subsidiary of Medi Assist Insurance, TPA. So, from a customer and a service and experience perspective, it is absolutely one. And of course, there's a bit of an operational alignment and system alignment that will happen over the next 4-5 quarters. And from a revenue perspective, while Paramount was an IGAAP, and then after IndAS recast and after adjusting the revenue recognition models to be aligned to our models, we expect a little over Rs. 140 crores a year in the IndAS format to sort of accrue from what we have as numbers.

Analyst sought clarity on the financial impact and integration timeline of the Paramount acquisition, which management detailed as adding over ₹140 crores annually and requiring 4-5 quarters for full operational alignment.

Asked by Madhukar Ladha

Profitability and Growth of Technology Services Direct
From a cost perspective, of course, like I said earlier, this has all the characteristics to be a much higher gross margin business. Given that, typically in our other contracts where we have people deployments, the cost of people tends to be a pass-through cost, which also dilutes margins. So, this one is a pure technology cost. So, the gross margins are certainly better in the tech services business.

Analyst inquired about the nature and profitability of the new 2.5% technology services revenue, which management confirmed as a high-margin business leveraging existing tech investments.

Asked by Rishi Jhunjhunwala

2 min read 6 chapters

Detailed narrative

Strong Premium Growth and Market Share Gains

Medi Assist reported a robust 18.5% year-on-year growth in total premium under management, reaching ₹7,076 crores as of June 30, 2025. This growth was broad-based, with the group segment clocking 20.4% YoY growth. The company's total market share expanded to 23.1% in June 2025 from 21.3% in June 2024, demonstrating significant competitive gains. Group segment market share specifically rose to 33.2% from 30.2% in the same period last year.

Improved Profitability and Operational Efficiency

The company's operating EBITDA grew 19.3% YoY to ₹42 crores, resulting in a healthy operating EBITDA margin of 22.0% for Q1 FY26, an improvement from 20.7% in H1 FY24. Profit for the year (PAT) increased by 15.7% YoY to ₹22.6 crores, with a PAT margin of 11.4%. These improvements reflect the benefits of integration of prior acquisitions and continued focus on operational efficiencies, with annualized revenue per average headcount reaching ₹14.9 lakhs.

Strategic Focus on Technology and AI/ML

Medi Assist continues to invest heavily in technology, with quarterly spend towards technology representing 5%-7% of revenue. The company's AI/ML frameworks are yielding significant results, with fraud, waste, and abuse savings increasing threefold to ₹160 crores in Q1 FY26, up from ₹50 crores in Q1 last year. AI-led fraud detection now accounts for 80% of all detected frauds. Technology services contributed 2.5% to operating revenue, and management expects these services to have higher gross margins than core TPA business.

Paramount Acquisition and Future Revenue Contribution

The acquisition of Paramount Health Services and Insurance TPA was successfully closed on July 1, 2025, for an equity value of ₹412.4 crores. This acquisition is expected to add over ₹140 crores annually in revenue (IndAS format) and will begin consolidating from Q2 FY26. While the integration may lead to a 200-250 basis points impact on consolidated margins for 5-6 quarters, the company aims to restore consolidated margins to 23%.

Diversified Growth Levers and Retail Strategy Evolution

Beyond group business, Medi Assist is focusing on retail, government, and international private medical insurance (IPMI) markets. The Mayfair arm (global business) saw phenomenal revenue growth of 35.6% YoY. In retail, while overall premium growth was 0.2% YoY, premiums serviced for private and SAHI insurers grew by nearly 89%. The company is also exploring models where retail services might increasingly be reflected as technology revenue, moving beyond traditional premium-based reporting.

Addressing Group Business Softness and Diversification

Management acknowledged some underlying softness in group business's same-store growth, historically driven by lives/employment growth. However, this is being compensated by benefits expansion and higher employee opt-ins for enhanced benefits. The company has diversified its client base, with premiums from ITeS and BFSI sectors now below 30%-35% of the top 50 accounts, reducing reliance on specific industries and mitigating risks from sector-specific slowdowns.

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