Fundamental Report Max Healthcare Institute Limited

Max Healthcare Institute Limited (Max Healthcare) is one of India’s largest healthcare service providers, providing integrated healthcare services through a network of primary care clinics, multi-specialty hospitals, medical centres, and super-specialty hospitals. It delivers secondary and tertiary care across a wide spectrum of specialties, with main centres of excellence in oncology, neurosciences, cardiac sciences, orthopaedics, renal sciences, liver and biliary sciences, and minimal access metabolic and bariatric surgery (MAMBS). Max Healthcare operates two strategic business units – Max@Home, which provides home-based healthcare and wellness services, and Max Lab, which offers pathology services outside the hospital network. It operates 22 healthcare facilities with over 5,200 beds, supported by more than 5,700 clinicians across 30+ specialties, mainly focused in NCR Delhi, Haryana, Punjab, Uttarakhand, Maharashtra, and Uttar Pradesh.

Recommendation                          ACCUMULATE

Accumulation Price                                         Rs.  1050-1010

Target Price                                   Rs.  1250

Time Horizon 12 Months

Management Commentary on the business & its future prospects:

1. The company is using technology across its hospitals to improve efficiency and quality of care, such as a nursing app that helps track patient vitals and treatments, reducing manual work and errors.
2. It is expanding oncology services, especially radiation oncology, at newer hospitals like Dwarka and Lucknow, where management sees strong and long-term demand.
3. Dwarka hospital is already running at high occupancy of around 81%, while Noida is at about 64% and gradually improving after receiving necessary licences.
4. New capacity added through brownfield expansions is breaking even quickly, and margins should improve further as utilisation increases.
5. Cash flows were temporarily impacted due to delayed payments from government schemes like CGHS and ECHS, which is a regular, seasonal issue and should normalise.
6. The company is spending heavily on expansion, which has increased debt, but this is driven by growth plans rather than any operational weakness.
7. Management explained that insured and self-pay patients are similar in behaviour, so insurance-related issues mainly affect the mix, not overall patient volumes.
8. Max@Home, which started in metro cities, is seeing strong demand in tier-2 cities, prompting expansion into locations like Lucknow, Dwarka, Nagpur, and Noida.
9. Competition in Noida and Lucknow is limited, and the Jaypee acquisition gave the company an immediate presence, with nearby land allowing easy future expansion.

Q3FY26 Result Analysis

• It reported revenue from operations of ₹2,067.52 crore in Q3FY26, registering a growth of 10.7% YoY compared to ₹1,868.31 crore in Q3FY25. However, on a QoQ basis, revenue declined by 3.18% from ₹2,135.47 crore in Q2FY26.
• EBITDA stood at ₹490.10 crore in Q3FY26, reflecting a YoY growth of 15.2% from ₹425.50 crore in Q3FY25. However, EBITDA declined by 14.78% QoQ from ₹575.15 crore in Q2FY26, suggesting margin pressure on a sequential basis.
• The EBITDA margin was reported at 23.70% in Q3FY26, improving from 22.77% in Q3FY25 on a YoY basis. However, it declined from 26.93% in Q2FY26 on a QoQ basis.
• The company reported a PAT of ₹300.92 crore in Q3FY26, marking a robust YoY growth of 26% compared to ₹238.80 crore in Q3FY25. However, PAT declined significantly by 38.75% QoQ from ₹491.30 crore in Q2FY26.
• On a quarterly basis, performance was impacted due to a temporary shift toward institutional patients, disruption in cashless insurance services, and regulatory changes like GST reduction and CGHS pricing revisions.
• Average occupancy for the Network stood at 74%, compared to 75% in Q3FY25 and 77% in the trailing quarter, despite an 8% YoY increase in operational bed capacity. Occupied bed days were up by 7% YoY, but dipped by 4% QoQ due to seasonality.
• It has taken a significant step to expand its geographic presence in Western India by planning the development of a 450-bed hospital on a prime land in Pune, targeted for completion by 2030. Additionally, the Board has approved the addition of 260 beds at Max Dwarka, increasing the hospital’s total capacity to 560 beds.
• Average Revenue Per Occupied Bed (ARPOB) for the quarter stood at ₹77,900, reflecting a growth of 3% YoY. On a sequential basis, ARPOB improved marginally from ₹77,300 reported in Q2FY26.
• Management expects oncology contribution to gradually increase again, as it has been growing structurally over the past few years, driven by rising cancer cases and increasing demand for specialized treatments.
• Despite concerns regarding rising hospital capacity, management believes supply growth remains moderate at around 5% CAGR, while demand continues to be robust, particularly in key regions such as NCR. In markets like Gurgaon, strong inflow of patients from nearby regions and intercity demand is expected to absorb incremental capacity, thereby limiting long-term competitive pressures.
• In terms of capex, the company is on track to spend around ₹1,900 crore in FY26, although actual spending may be slightly lower due to conservative planning and timing differences in project execution.

 

Profit and Loss Statement:

Particulars (In Cr)	Q3FY26	Q3FY25	Q2FY26	QoQ%	YoY%	FY25	FY24	YoY%
Sales	2067.52	1868.31	2135.47	-3.2	10.7	7028.46	5406.02	30
Other Income	45.38	33.3	32.9	37.9	36.3	155.64	178.07	-12.6
Total Income	2112.9	1901.61	2168.37	-2.6	11.1	7184.1	5584.09	28.7
Total Expenditure	1577.42	1442.81	1560.32	1.1	9.3	5253.29	3913.9	34.2
EBIDT	535.48	458.8	608.05	-11.9	16.7	1930.81	1670.19	15.6
Interest	59.67	52.39	53.92	10.7	13.9	165.02	59.89	175.5
EBDT	475.81	406.41	554.13	-14.1	17.1	1765.79	1610.3	9.7
Depreciation	111.27	97.54	108.1	2.9	14.1	359.42	244.98	46.7
EBT	364.54	308.87	446.03	-18.3	18	1406.37	1365.32	3
Tax	46	90.98	10.29	347.0	-49.4	336.11	271.25	23.9
Deferred Tax	17.62	-20.91	-55.56	-131.7	184.3	-5.62	36.43	-115.4
PAT	300.92	238.8	491.3	-38.8	26	1075.88	1057.64	1.7

Balance Sheet:

Particulars (In Cr)	FY25	FY24	FY23	FY22	FY21
SOURCES  OF  FUNDS :
Share Capital	972.14	971.91	970.92	969.61	965.95
Reserves Total	8408.73	7436.23	6438.62	5312.86	4672.73
Equity Application Money	0	0	0.05	0	0
Total Shareholders’ Funds	9380.87	8408.14	7409.59	6282.47	5638.68
Secured Loans	2488.83	1149.12	564.32	726.65	915.85
Unsecured Loans	521.46	149.83	124.64	186.73	185.56
Total Debt	3010.29	1298.95	688.96	913.38	1101.41
Other Liabilities	604.04	639.77	605.1	668.4	534.1
Total Liabilities	12995.2	10346.86	8703.65	7864.25	7274.19
APPLICATION OF FUNDS :
Gross Block	13342.39	9965.52	7958.37	7759.6	7099.22
Less: Accumulated Depreciation	1840.8	1181.83	919.67	742.02	562.84
Net Block	11501.59	8783.69	7038.7	7017.58	6536.38
Capital Work in Progress	900.72	553.04	252.43	151.12	26.93
Investments	2.89	2.12	0.51	0.51	0.51
Current Assets, Loans & Advances
Inventories	106.21	79.84	76.23	61.36	53.8
Sundry Debtors	687.31	462.69	336.12	385.36	365.89
Cash and Bank	681.89	1099.27	1468.07	499.31	652.92
Loans and Advances	117.16	64.38	62.65	54.26	51.86
Total Current Assets	1592.57	1706.18	1943.07	1000.29	1124.47
Less : Current Liabilities and Provisions
Current Liabilities	1492.26	1077.08	912.7	601.79	648.9
Provisions	78.83	61.15	48.37	41.68	39.43
Total Current Liabilities	1571.09	1138.23	961.07	643.47	688.33
Net Current Assets	21.48	567.95	982	356.82	436.14
Deferred Tax Assets	357.54	139.4	149.67	162.11	0.98
Deferred Tax Liability	977.69	654.25	586.8	843.52	581.92
Net Deferred Tax	-620.15	-514.85	-437.13	-681.41	-580.94
Other Assets	1188.67	954.91	867.14	1019.63	855.17
Total Assets	12995.2	10346.86	8703.65	7864.25	7274.19

Cash Flow Statement:

Particulars (In Cr)	FY25	FY24	FY23	FY22	FY21
Cash and Cash Equivalents at Beginning of the year	979.84	1374.33	480.97	626.59	111.01
Net Cash from Operating Activities	1459.31	1121.8	1284.13	748.49	117.86
Net Cash Used in Investing Activities	-1614.11	-1252.55	-102.21	-771.77	206.39
Net Cash Used in Financing Activities	-163.8	-263.74	-288.56	-294.17	191.33
Net Inc/(Dec) in Cash and Cash Equivalent	-318.6	-394.49	893.36	-317.45	515.58
Cash and Cash Equivalents at End of the year	661.24	979.84	1374.33	309.14	626.59

Source: Company website, EWL Research

Outlook:

Max Healthcare is one of a India’s largest healthcare providers, offering integrated primary, secondary, and tertiary care through clinics, multi-specialty, and super-specialty hospitals, with centres of excellence in oncology, neurosciences, cardiology, orthopaedics, renal, liver, and metabolic-bariatric surgery. It is executing one of India’s largest hospital expansion programs, targeting ~ 3,000+ additional beds across Delhi NCR, Mohali, Lucknow, Gurgaon, Thane, and Nagpur. In FY26, it plans to add ~1,500 beds, including 1,000 brownfield and 500 Greenfield beds, driving near-term growth while strengthening long-term capacity. Strategic partnerships with global and domestic universities, along with digital adoption, AI-driven diagnostics, and remote care platforms, enhance clinical excellence, operational efficiency, and patient reach, supporting sustainable volume-led growth and profitability.

 

On a TTM basis, it reported an EPS of ₹14.52 and is trading at a P/E of 72.25x at the current market price of ₹1,049 per share. Thus, we recommend an Accumulate rating on the stock, with a price range of ₹1,050 – 1,010 and a target price of ₹1,250 within an investment horizon of 12 months.

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