Buy Max Healthcare Institute Ltd For Target Rs. 1,315 By Axis Securities Ltd
• Max Healthcare reported revenue of Rs 2,326 Cr, in line with expectations, supported by steady ARPOB and contributions from new hospitals despite a marginal drop in occupancy. ARPOB stood at Rs 77,100, remaining flat YoY, while occupancy improved to 75% (up 300 bps YoY on a like-for-like basis), driven by a 30% YoY growth in occupied bed days. EBITDA margins stood at 26.4%, stable over the year despite additions of new assets. PAT was Rs 376 Cr, reflecting a 21% YoY growth driven by operational efficiencies and cost control.
• Developing Hospitals to Drive Growth: Developing hospitals demonstrated a robust ramp-up, with revenue growing 22%. Occupancy rates improved significantly, by 800 bps sequentially and 400 bps YoY, driving a 14.5% increase in occupied bed days. However, ARPOB remained subdued, primarily due to a shift in payer mix. Max Dwarka reached EBITDA breakeven within just six months of operations, reporting Q4 revenue of Rs 59 Cr and achieving 73% occupancy on 235 commissioned beds as of Mar’25. Max Lucknow and Max Nagpur continued to deliver strong performance, with EBITDA rising 102% and 86% YoY, respectively, on the back of 56% and 23% revenue growth. The integration of new units, including Max Noida and JP Hospital, is progressing well, with management confident of further occupancy ramp-up and margin expansion as these hospitals mature and operational synergies are realised..
• Revenue and Margins to Improve in matured hospitals: Mature hospitals maintained their strong momentum, achieving 16% YoY revenue growth. Occupancy rates improved by 200 bps QoQ and 400 bps YoY, while ARPOB increased by 7% YoY, reflecting higher realisations and an enhanced therapy mix. This robust growth was underpinned by strong performance from existing hospitals and a continued focus on optimising service offerings. As a result, EBITDA margins for mature hospitals expanded by 70 bps YoY to 28.6%, benefiting from greater operating leverage and scale efficiencies.
• Outlook: Max Healthcare’s revenue mix remains well-balanced, with continued growth in institutional and international patient segments. The recent increase in institutional business share is expected to stabilise as higher-value payer segments expand. The short-term margin impact from new hospital ramp-ups should gradually ease as these facilities scale operations. Lucknow and Nagpur are expected to witness further profitability expansion, driven by higher occupancy rates and the introduction of new clinical programs.
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