Medi Assist Healthcare Services Limited

Medi Assist reported a robust 20.2% year-on-year growth in total premium under management (PUM), reaching Rs. 12,719 crores as of September 30, 2025. This was driven by a 22.5% YoY increase in group premiums to Rs. 11,447 crores. Total income for Q2 FY26 grew 25.5% YoY to Rs. 234.8 crores, and for H1 FY26, it increased 20.2% YoY to Rs. 432.8 crores, reflecting strong operational performance. The company's market share in total health premiums in India expanded to 21.3% from 19.2% a year ago, with group segment market share rising to 32.2% from 28.4%.

The ongoing integration of Paramount TPA significantly impacted Q2 FY26 profitability, leading to a 150 basis points dilution in EBITDA. Paramount contributed Rs. 488 crores to group premiums and Rs. 104 crores to retail premiums. Management indicated that the full integration process, including the normalization of Paramount's profitability to Medi Assist's original margin profile, is expected to take 4 to 5 quarters. This acquisition also led to increased depreciation and amortization due to intangible asset creation, which will likely remain at the current run rate for a few years.

Medi Assist continues to invest heavily in technology, with an estimated 100 basis points impact on Q2 EBITDA from these investments. The company successfully deployed its MAtrix claims platform with Star Health and Allied Insurance, with 40% of claims volume already migrated. Technology-driven fraud, waste, and abuse prevention activities delivered savings of Rs. 230 crores in H1 FY26, a 50% increase YoY. The Raksha Prime AI/ML-based instant checkout offering enabled over 156,000 discharges in H1 FY26. SaaS revenues currently constitute 2% of total revenues, with expectations for higher gross margins at steady state as the platform scales.

Q2 FY26 EBITDA (excluding other income) grew 3.3% YoY to Rs. 39.7 crores, with a margin of 17.1% on operating revenue. However, Q2 PAT declined 61.5% YoY to Rs. 8.1 crores, and H1 PAT declined 23.3% YoY to Rs. 30.7 crores, primarily due to Paramount's lower profitability, integration costs, and higher depreciation/amortization. Management expressed confidence in restoring core business EBITDA margins to 22-23% within the next 4 to 5 quarters as integration benefits materialize and technology investments yield returns, though reported PAT may remain subdued due to accounting impacts.

As of September 30, 2025, the company reported a net cash balance of minus Rs. 20.9 crores and a net worth of Rs. 591.2 crores. Current debt stands at approximately Rs. 245 crores, with Rs. 150 crores expected to be paid off in the next 1-2 months. Management provided a clear target to achieve debt-free status by March-April 2026, driven by strong cash generation from the business. This commitment aims to strengthen the balance sheet and reduce financing costs, improving overall financial health.

While the group segment saw robust growth, retail premium growth was modest at 2.6% YoY, reaching Rs. 1,272 crores, and retail market share slightly declined to 5.3% from 5.6%. However, premiums administered for private and SAHI insurers in the retail segment grew significantly by 47.7% YoY. Management is bullish on the retail opportunity, leveraging its MAtrix platform and AI engine for fraud prevention to make a significant dent in market share. The recent GST exemption for retail health policies is expected to be beneficial and accretive to the whole industry in the long run.