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Growth to improve from FY27

Max Healthcare Institute (MAXHEALT) reported soft quarter with EBITDA growth of 8% YoY to Rs 6.82bn. The growth was impacted due to ongoing discontinuation of chemo drugs for institutional patients. Further bed addition was negligible which also impacted growth in FY26. We expect growth to improve from FY27 with benefit of new bed addition, CGHS price revision benefit and further ramp up across Noida and Dwarka unit. MAXHEALT operational efficiency has been commendable, especially in competitive markets like NCR. Our FY27E/28E EBITDA stands cut by 3-4% and we expect EBITDA to grow at 20% CAGR over FY26-28E. At CMP, stock is trading at 26.5x EV/EBIDTA on FY28E. We ascribe 30x EV/EBITDA based on FY28E. Maintain ‘BUY’ rating with revised TP of Rs. 1,175/share.

Soft quarter:

Consolidated EBITDA grew by 8% YoY to Rs 6.82bn vs our estimates at Rs 6.91bn. The quarter was soft due to ongoing discontinuation of chemo drugs for institutional patients. Further bed addition was negligible for FY26. OPM declined 40bps YoY to 26.8%. During FY26, the company added 412 beds mainly comprising of Dwarka, Nanavati, Lucknow and Mohali and divested 100 beds at Bulandshahr in Q2. During Q4, the company operationalized total 113 beds. Overall EBITDA/occupied bed was at INR7.34mn vs INR7.39mn in Q3FY26.

Occupancy improved by 100 bps QoQ:

Consolidated revenues came at Rs. 25.4bn (up 9% YoY) vs our estimate of INR 25.6bn. Consol occupancies were flat YoY and improved by 100 bps QoQ to 75%. ARPOB improved by ~1% YoY to Rs 77.9K. Institutional revenue share went up by 80bps YoY to 21.6%, while the insurance mix went down by 60bps YoY to 36.5%. Max Lab and Max@Home revenue stood at Rs 520mn and Rs 730mn respectively. For FY26, institutional mix went up by 250bps to 21.9%. During Q4, net debt decreased by Rs. 2.6bn QoQ to Rs19.1bn.

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