Max Healthcare has reported a steady performance in Q3FY26, with net profits rising 9% year-on-year to Rs 344 crore. Despite a few challenges on the cost front, the hospital chain continued to grow its top line, backed by expansion and strong demand from international patients.
The December quarter saw Max Healthcare balancing growth and strategic investments, all while navigating regulatory and operational costs. Here’s a detailed look at the company’s performance and developments during Q3FY26.
Market Performance
- Net Profit (PAT): Rs 344 crore, up from Rs 316 crore YoY
- Gross Revenue: Rs 2,608 crore, a 10% YoY increase
- Operating EBITDA: Rs 648 crore, up 4%
- Operating Margin: 26.1%, slightly down from 27.3% last year
Even with Rs 55 crore in exceptional expenses—linked to the Code on Wages, 2019, and stamp duty from the amalgamation of Crosslay Remedies and Jaypee Healthcare—the company maintained healthy profitability.
Revenue Drivers
The hospital chain’s revenue growth was supported by multiple factors:
- Occupied Bed Days (OBDs): 7% increase YoY, indicating higher patient inflow
- International Patient Revenue: Rs 230 crore, up 14% YoY, contributing around 9% of total hospital revenue
- Average Revenue per Occupied Bed (ARPOB): Rs 77,900, up from Rs 75,900 last year
While ARPOB rose, EBITDA per bed slightly declined to Rs 71.3 lakh from Rs 73 lakh due to cost pressures. Occupancy for the quarter stood at 74%, reflecting steady operational utilization.
Margin Pressures
Operating margins softened for Q3FY26, primarily due to:
- Discontinuation of high-value patented chemotherapy drugs for institutional patients after CGHS restrictive pricing guidelines
- Pre-commissioning expenses of new brownfield capacities at Mohali, Nanavati Max, and Max Smart
- Temporary disruption in cashless services for standalone health insurer patients, leading to higher reliance on lower-tariff PSU patients
- GST rate adjustments impacting overall cost structure
Despite these pressures, the company maintained robust operating EBITDA of Rs 648 crore.
Expansion and Growth Pipeline
Max Healthcare is aggressively expanding its capacity to meet increasing healthcare demand. Key developments include:
- MSSH Mohali: 53 new beds commissioned with an EBITDA margin of 39%
- Nanavati Max: 63 beds added, delivering a 31% margin
- Max Smart: 400-bed tower expected to go live by February
- MSSH Dwarka: Board approved a 260-bed expansion, taking total capacity to 560 beds
- Pune Greenfield Hospital: Acquisition of Yerawada Properties Pvt. Ltd. to develop a 450-bed hospital, targeted for commissioning in 2030
These expansions are expected to enhance patient capacity, strengthen revenue streams, and improve overall margins in the long term.
Cash Flow and Debt
Max Healthcare’s cash flow and balance sheet reflected ongoing investments:
- Free Cash from Operations: Rs 281 crore, marginally lower than Rs 303 crore last year
- Expansion & Modernisation Investments: Rs 408 crore deployed
- Net Debt: Rs 2,166 crore, up from Rs 2,067 crore in the previous quarter
The increase in debt aligns with the company’s aggressive growth strategy, aimed at adding high-margin beds across multiple facilities.
Summary
Max Healthcare Q3FY26 results showcase a hospital chain navigating growth and regulatory challenges with steady performance. Key takeaways include:
- PAT up 9% YoY to Rs 344 crore
- Revenue growth of 10% YoY to Rs 2,608 crore
- International patient revenue contribution remains strong at Rs 230 crore
- Operating margins slightly compressed to 26.1% due to regulatory and expansion-related costs
- Expansion pipeline progressing with multiple new beds across Mohali, Nanavati Max, Max Smart, and Dwarka
- Strategic acquisition in Pune signals long-term growth planning
Even with rising costs and tighter margins, Max Healthcare is steadily cementing its position in the healthcare sector, while actively expanding its capacity to support future growth.
Source: Moneycontrol
Easy & quick
Leave A Comment?