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Consistent growth momentum intact in 1QFY26

Work in progress to add beds/expand to new cities for

diagnostics/home care

• Max Healthcare (MAXH) delivered largely in-line revenue/EBITDA for the quarter. However, earnings missed estimates by 16% due to higher depreciation, interest, and tax rates.
• That said, MAXH has continued to post a consistent 25% YoY growth in revenue for 16 quarters, with an average EBITDA margin of 27%.
• Not only have new/acquired hospitals scaled up in revenue/EBITDA over the past 12M, but the base hospitals have also continued to grow through case mix/payor mix optimization.
• Even other businesses (Max Lab and Max@home) sustained momentum with 19%/22% growth in 1QFY26.
• We reduce our estimates by 9%/3% for FY26/FY27 to factor in: a) higher depreciation/tax rate and some impact of opex related to newer hospitals. We value MAXH on an SoTP basis (premised on 36x 12M forward EV/EBITDA for the Hospital business, 30x 12M forward EV/EBITDA for Max@lab, and 11x EV/sales for Max@home) to arrive at our TP of INR1,450.
• We believe that MAXH is well-positioned to sustain its earnings growth trajectory, supported by improving operations at existing hospitals, scaling up of recently added/new hospitals, and bed additions (largely through the brownfield route). Even the diagnostics and home care businesses are scaling up at a healthy pace by expanding into new cities and deepening their presence in existing cities. We expect 21%/22%/26% revenue/EBITDA/PAT CAGR over FY25-27. Reiterate BUY.

Revenue/EBITDA largely in line; miss on earnings

• In 1QFY26, Max’s network revenue (including the Trust business) grew 27% YoY to INR24.5b (our est. INR24.4b).
• EBITDA margin contracted 40bp YoY to 25.2% (our est. 25.6%), driven by higher raw material costs (up 110bp as a % of sales), which were slightly offset by lower employee costs (down 67bp).
• EBITDA grew 25% YoY to INR6.2b (our est. INR6.3b).
• Adjusted PAT rose 20% YoY to INR3.7b (our est. INR4.3b).
• EBITDA per bed (annualized) stood at INR6.9m (-2% YoY and -7.3% QoQ).
• ARPOB stood at INR78k in 1QFY26 (+1% YoY). Occupancy came in at 76% in 1QFY26, with occupied bed days (OBDs) rising 26% YoY.
• The institutional revenue share increased 390bp YoY to 21.8% in 1QFY26.
• Max Lab's revenue stood at INR480m in 1QFY26 (+19% YoY/6% QoQ)
• Max Home’s gross revenue was INR600m (+22% YoY, +6% QoQ) in 1QFY26.
• Net debt stood at INR17.5b at the end of 1QFY26.

Highlights from the management commentary

• Excluding the newer hospitals added since 4QFY24, the base hospitals delivered revenue/EBITDA YoY growth of 13%/15% for the quarter.
• The 160-bed tower at Max Mohali has been completed. The trial run was initiated in Jul’25.
• Forest clearance at Max Vikrant remains delayed due to the ongoing dispute between DDA and the Delhi government over tree cutting in an eco-sensitive area.
• The MSSH Saket hospital (400 beds) is expected to be commissioned by the end of 2QFY26.
• The bed capacity at Lucknow is expected to increase to 520 by the end of FY26 from the current size of 413 beds.
• At Gurgaon, structural MEP work is in progress, with high-end equipment under installation. The facility is expected to be commissioned by the end of FY26.
• Net debt is expected to increase by INR4b-INR5b by the end of FY26.

Conference call highlights

• The Nanavati hospital is on track to get commissioned in the next few weeks.
• With respect to the 100-bed facility at Nagpur, while the civil contract has been awarded, management is awaiting environmental clearance to commence construction.
• Work at the Patparganj hospital is on track following environmental clearance, and the tendering process is currently underway.
• The Lucknow hospital posted 97% YoY growth in revenue and 191% YoY growth in EBITDA for the quarter.
• The Nagpur hospital posted 27% YoY growth in revenue and 27% YoY growth in EBITDA for the quarter.
• The Noida hospital posted 13% YoY growth in revenue and 32% YoY growth in EBITDA for the quarter.
• For MAXH, 1Q is typically the weakest among the four quarters.

Strong hospital growth with steady diagnostics and

home care performance

Bed additions and occupancy gains drove strong revenue growth

• MAXH increased operational beds by 25% YoY to 4749 in 1QFY26. Lower ARPOB in certain newer hospitals led to just 1.2% YoY growth in ARPOB. For existing hospitals, ARPOB grew 4.9% YoY for the quarter. ? That said, revenue grew 27% YoY during the quarter, indicating a strong contribution from bed additions and higher occupancy levels driving growth for MAXH.
• Moreover, international patients revenue increased 32% YoY in 1QFY26, driven by increased focus on geographies facing limited impact from geopolitical tensions.
• Newer units (MSSH Dwarka and MSSH Noida) revenue came in at INR2.3b, and EBITDA was INR270m (margin of 12.2%) for the quarter.
• Institutional share increased 390bp YoY as a % of sales in terms of payor profile for the quarter. The case mix was largely stable on a YoY basis.
• EBITDA per bed, excluding newer units, was INR7.5m, rising 7% YoY.
• With the strategic intent to focus on superspecialty care in larger cities, MAXH has divested hospitals at Chitta and Anoopshahr (part of Jaypee Healthcare) during the quarter.
• After adding 856 beds in FY25, ongoing projects are expected to add 1,500 beds in FY26 and ~800 beds in FY27.
• Overall, we expect the company to post a 16% revenue CAGR, reaching INR120b over FY25-27.

Max@lab and Max@home sustain strong double-digit growth with higher realizations

• Max@lab sustained its momentum with 19% YoY growth in 1QFY26, after 22% YoY growth exhibited in FY25.
• EBITDA margin stood at 13% for 1QFY26. Subsequently, EBITDA grew 27% YoY to INR60m. The average realization stood at 16% YoY, led by increased exposure to high-end tests.
• With a network of 550+ collection centers, 700+ pick-up points, and 50+ labs spread across 55+ cities, MAXH is building a strong franchise in the diagnostic business.
• We expect a 25% revenue CAGR, reaching INR2.7b over FY25-27.
• Max@home posted 22% YoY growth in revenue for the quarter, reaching INR600m at the gross level, compared to 18% YoY growth in revenue for FY25. The average realization also improved 22% YoY in 1QFY26.
• Currently, the company operates in 15 cities, offering 15 specialized services. We build in a 22% revenue CAGR for this segment, driven by resource expansion and both the widening and deepening of its business reach.

Reiterate BUY

• We maintain our estimates for FY26/FY27. We value MAXH on an SoTP basis (premised on 35x 12M forward EV/EBITDA for the Hospital business, 30x 12M forward EV/EBITDA for Max@lab, and 11x EV/sales for Max@home) to arrive at our TP of INR1,350.
• MAXH posted a strong 19% earnings CAGR over FY22-25, backed by efforts to improve EBITDA per bed and expand bed capacity in targeted micro markets. It has reasonably expanded its offerings and increased its reach for the diagnostic and home service businesses. We expect MAXH to post a 27% earnings CAGR over FY25-27, as it continues to add beds (32% YoY increase in bed capacity expected in FY26) and augment performance at current sites through the case mix/payor mix optimization. While land acquisition is in place and past executions provide good visibility for growth, it still has sufficient financial war chest, if required, for potential land acquisitions, O&M contracts, or inorganic opportunities. Reiterate BUY.

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