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Aggressive expansion driving growth: MAXHEALT’s outlook remains strong, supported by aggressive capacity expansion, sustained occupancy ~75% and industry-leading EBITDA margin of 26.7% in Q4FY26. The company is adding significant capacity through the 500-bed Gurgaon hospital, 700-bed Lucknow greenfield project and multiple brownfield expansions across key markets. Newly-ramped-up hospitals, such as Dwarka, Noida and Lucknow are rapidly scaling up profitability and it continues to strengthen its clusterled hospital strategy.

View and Valuation: We forecast Revenue/EBITDA/APAT to expand at a CAGR of 23.8%/27.0%/25.4% over FY26–29E. Valuing the stock on FY28E SoTP valuation, we have revised our target price to INR 1,160 (from 1,250) and reduced our rating to ‘ADD’ (from BUY) on the stock. We value Hospitals at 26x EV/EBITDA, 15x to Max Lab and 3x to Max Home.

Result missed expectation on all fronts, with marginal YoY growth

* Revenue grew by 10.1% YoY and 2.7% QoQ to INR 25.4 Bn (vs. CIE estimate: INR 26.5 Bn), driven by increase in occupied bed days.

* EBITDA grew by 11.4% YoY and 7% QoQ to INR 6.8 Bn; margin improved by 31 bps YoY and 107 bps QoQ to 26.7%(vs. CIE estimate: 25.8%)

* APAT de-grew by 4.0% YoY and 7.0% QoQ to INR 3.7 Bn (vs. CIE estimate: INR 4.1 Bn), with a PAT margin of 14.8%.

MAXHEALT to add ~2,250 beds by FY29: MAXHEALT is entering a strong expansion phase with 20%+ incremental capacity already being rolled out across Mohali, Nanavati Mumbai, Saket Smart, Lucknow and Bhubaneswar. The management highlighted that the previous expansion cycle involving Dwarka, Nagpur, Lucknow and Jaypee has already delivered strong returns. Dwarka is operating at 80–85% occupancy and is now undergoing another 260-bed brownfield expansion alongside a new oncology center. Additionally, MAXHEALT plans a multi-location Lucknow strategy with 712 beds at Shaheed Path with INR 14,000 Mn investment.

Operating leverage to accelerate profit compounding: MAXHEALT appears structurally positioned for strong operating leverage as recent capacity additions mature towards optimal occupancy. Dwarka has already reached 80–85% utilisation, while Noida, Lucknow, Mohali and Nanavati are witnessing improving traction following doctor additions and specialty ramp-up. We believe improving occupancy across newly-commissioned facilities can materially accelerate EBITDA compounding, margin expansion and return ratios in the next 3–5 years. MAXHEALT continues to strengthen its cluster-led hospital strategy, which, the management believes, creates superior clinician attraction, operational scalability and market dominance. We believe MAXHEALT’s cluster-led expansion strategy can significantly enhance referral ecosystems, clinical depth, patient stickiness and long-term premiumisation across key urban markets.

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