Add Max Healthcare Institute Ltd For Target Rs.1,160 by Choice Institutional Equities Ltd
Strong Capacity Pipeline Underpins Long-term Growth
MAXHEALT growth is supported by a multi-year capacity expansion pipeline, with projects across Gurgaon, Lucknow, Nagpur, Zirakpur, Dwarka, Pune, Patparganj and Nanavati through FY30. Rising occupancy and ARPOB at newer facilities are projected progressively unlock operating leverage and EBITDA growth. The Kalinga turnaround, potential medical education with ~25% ROCE and scaling up of Max@Home and Max Lab further support the company’s growth
Strong revenue growth, but sequential margin pressure weighs on earnings
* Revenue grew by 15.3% YoY and 11.5% QoQ to INR 28.3 Bn (vs. CIE estimate: INR 26.9 Bn), driven by increase in occupied bed days.
* EBITDA grew by 15% YoY and 2.9% QoQ to INR 7.0 Bn; margin remained flat on YoY and contracted 206 bps QoQ to 24.6%(vs. CIE estimate: 25.3%), due to brownfield capacity expansion and Kalinga Hospital acquisition.
* APAT grew by 3.0% YoY and flat on QoQ to INR 3.7 Bn (vs. CIE estimate: INR 3.8 Bn), with a PAT margin of 13.2%
Capacity expansion set to drive a multi-year revenue and EBITDA upswing:
The company is entering into a strong capacity-led growth phase, with 100 beds at Lucknow, 500 beds at Gurgaon Sector 56, 100 beds at Nagpur and 400 beds at Zirakpur. Additionally, it will have 260 beds at Dwarka, 200 beds at Pitampura, 271 beds at Nanavati Phase 2, 400 beds at Patparganj and 450 beds at Pune scheduled through FY27–FY30. Newly-commissioned hospitals typically see occupancy ramp-up first, followed by ARPOB and EBITDA acceleration; management anticipates this trajectory to become visible within the second-third quarter of operations
Underutilised assets offer significant margin and return upside:
The larger opportunity lies in improving utilisation and profitability of recently acquired or expanded assets. Kalinga operates at only 50% occupancy with INR 35,000 ARPOB, targeting a potential 50–80% improvement in both metrics through renovation, technology and clinical upgrades over the next year. Similarly, commissioned Nanavati capacity is already around 80% occupancy, with EBITDA expected to catch up rapidly. As occupancy rises, ARPOB improves and fixed cost gets absorbed, it creates significant operating leverage and potentially drives EBITDA growth faster than revenue.
Strong adjacency growth can build a broader healthcare ecosystem:
The future opportunity extends beyond hospital beds, with MAXHEALT building an integrated healthcare ecosystem across homecare, diagnostics, international patients and digital channels. Max@Home operates 16 service lines across 15 cities with 56%+ repeat transactions, while Max Lab operates across 60+ cities and served 6 lakh+ patients during the quarte
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