Earnings Review
Max Health net falls on higher cost, acquisition spend
This story was originally published at 18:42 IST on 30 January 2025
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--Max Health Oct-Dec consol PAT INR 2.39 bln vs INR 2.89 bln year ago
--Analysts saw Max Health Oct-Dec consol net profit INR 3.61 bln
--Max Health Oct-Dec consol revenue INR 18.68 bln vs INR 13.35 bln year ago
--Max Health Apr-Dec consol PAT INR 7.57 bln vs INR 8.06 bln year ago
--Max Health Apr-Dec consol revenue INR 51.19 bln vs INR 39.83 bln year ago
--Max Health Oct-Dec network operating EBITDA INR 6.22 bln, up 32% on year
--Max Health Oct-Dec operating margin 27.3% vs 26.6% yr ago
--Max Health Oct-Dec avg revenue per occupied bed INR 75,900
--Max Health Oct-Dec free cash from operations at INR 3.03 bln
--Max Health to up Mohali hospital capacity to 400 beds form 250 beds
--Max Health Oct-Dec net profit is after one-time cost INR 740 mln
--Max Health Oct-Dec paid INR 740 mln for Jaypee Health shrholding change
--Max Health Oct-Dec intl patient revenue INR 2.01 bln vs INR 1.57 bln
--Max Health Oct-Dec overall occupancy 75% vs 73% year ago
--Max Health to set up 500 bed hospital at Thane near Mumbai
By Aman Aryan and Akshita Kumar
MUMBAI – Higher expenses and an acquisition-related one-time cost dragged Max Healthcare Institute Ltd.'s net profit for the December quarter down despite the company posting its highest revenue growth in 13 quarters. The healthcare services provider paid INR 736.3 million to the Yamuna Expressway Industrial Development Authority to secure approval to change the shareholding of Jaypee Healthcare Ltd., which it has acquired. The company's consolidated net profit for the quarter fell 17.5% on year to INR 2.39 billion, missing the Street's estimate of INR 3.61 billion.
The company's consolidated revenue rose 40% on year to INR 18.68 billion, its highest in five years according to data available with Informist. A 200-basis-point on-year expansion in bed occupancy and 36% on-year increase in occupied bed-days drove the company's consolidated revenue. Bed occupancy for the quarter was 75%, Max Healthcare said. However, the company's revenue also missed the consensus view of INR 21.36 billion. Sequentially, the company's consolidated revenue rose 9.4% while its consolidated net profit fell 15%.
Max Healthcare's total expenditure for the quarter rose 49% to INR 15.19 billion, eclipsing the 40% revenue growth. The growth in total expenditure was the highest on year in 14 quarters. On the other hand, the company's average revenue per occupied bed for the quarter fell to INR 75,900 from INR 76,800 in the year-ago quarter and INR 76,200 in the September quarter. Consequently, earnings before interest, tax, depreciation, and amortisation per bed also fell 3.4% on year to INR 7.3 million.
During the latest quarter, Max Healthcare recognised INR 5.61 billion as goodwill on account of the acquisition of Jaypee Healthcare. Max Healthcare acquired 64% stake in the company on Oct. 4 and the remainder on Nov. 11.
The consolidated operating EBITDA for the December quarter was INR 6.22 billion, up 32% from the year-ago quarter. The operating margin was 27.3%, up 70 bps from a year ago. The company recorded on-year EBITDA growth of 67% and 118% at its recently acquired hospitals in Lucknow and Nagpur, respectively, within nine months of acquisition, Max Healthcare said. Its recently launched hospital in Dwarka, Delhi, achieved an EBITDA break-even during the latest quarter. The Dwarka-based hospital had reported an EBITDA loss of INR 180 million in the previous quarter.
During the reporting quarter, the healthcare services provider's in-patient volume rose 42% on-year and outpatient consultations rose 39%. Max Heathcare recorded INR 2.01 billion revenue from international patients during the December quarter, compared with INR 1.57 billion in the corresponding quarter a year ago. This accounted for nearly 9% of the hospital's revenue, the company said. The company's free cash from operations for the reporting quarter was INR 3.03 billion, up 34% on year. The company will increase the upcoming Mohali hospital's capacity to 400 beds from the original plan for 250 beds.
The company will set up a 500-bed hospital in Thane near Mumbai, which is expected to be commissioned in the financial year 2027-28 (Apr-Mar). "Finally, with significant brownfield bed additions being commissioned within six months, we are poised for an exciting phase of accelerated growth," Abhay Soi, chairman and managing director of Max Healthcare, said.
For the nine months ended Dec. 31, the company's consolidated net profit was INR 7.57 billion, down 6% on year. Its consolidated revenue for Apr-Dec was INR 51.19 billion, up almost 29% on year. On Thursday, shares of the company closed at INR 1,043.85 on the National Stock Exchange, up 1.8%. End
Edited by Rajeev Pai
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