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Informist, Friday, Jan. 31, 2025

--Max Health: Endeavour is not to reduce institutional business 

--CONTEXT: Comments by Max Health management in post-earnings analyst call 

--Max Health: Planning to commission 500-bed hospital in Thane in FY28 

--Max Health: 2nd phase of expansion plan in Mumbai to be completed in 2 yrs 

MUMBAI – Max Healthcare Institute Ltd. said it expects to commission the 500-bed hospital in Thane in 2027-28 (Apr-Mar). "We are expanding our footprint in the Mumbai Metropolitan Region through our foray into the Thane micro market, given its rapid urban growth and proximity to Mumbai," the management said in post-earnings call with analysts.

The management said the company will acquire the hospital from the developer, VR Konkan Pvt. Ltd., 12 months after the hospital becomes operational. On Thursday, the healthcare service provider said it had signed a 15-year lease agreement with VR Konkan, with an initial lease term of five years, and will invest INR 2.17 billion in equipment and loose furniture for the same. It also said that the second phase of the expansion plan in Mumbai will be completed in two years.

Commenting on market buzz about insurance companies planning to negotiate about pricing with the help of the Insurance Regulatory and Development Authority of India, the management said it does not know about any such discussions. "I don't think insurance companies can get into the umbrella and have IRDAI negotiate that...I think it's far beyond their mandate," the management said.

Max Healthcare also expects some benefits from the latest cap on the increase in insurance premiums for senior citizens. "They are giving a pricing of 10% per year. What we negotiate with insurance companies is around 10-12% per two years," the company said. The change in insurance prices every two years is a maximum of 12-13% and that comes to a medical inflation of about 6% per year effectively, the company said.

On Thursday, IRDAI asked insurers not to charge premium rates over 10% annually for senior citizens, with immediate effect. This was after the regulator observed that high premium rates were being offered to senior citizens for some health insurance products. The regulator also asked insurers to consult it before charging a premium of over 10% per annum and withdrawal of individual health insurance products offered to elderly citizens.

For the quarter ended December, the company posted a 17% on-year decline in consolidated net profit to INR 2.39 billion, but revenue rose 40% to INR 18.68 billion. The rise in revenue failed to push the bottom line higher due to higher expenses and acquisition-related one-time costs. Its shares, which were choppy in the first-half of the session Friday, rose after the earnings call with analysts ended. The shares closed the day 1.7% higher at INR 1,061.25 on the National Stock Exchange.  End

Reported by Anjana Therese Antony

Edited by Ashish Shirke

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