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Informist, Monday, Oct. 27, 2025

By Narayana Krishna

HYDERABAD - Max Healthcare Institute Ltd. is expected to post healthy revenue growth for the September quarter, driven by the steady performance of its existing hospitals and incremental contributions from newly-added facilities. The overall occupancy rate is expected to have declined slightly, largely because of the significant addition of new beds and the high base from dengue cases a year ago, according to analysts tracking the company.

The company's operating margins are likely to remain stable, supported by efficient cost management and a better service mix. The average revenue per occupied bed is expected to have improved modestly for the reporting quarter, indicating sustained demand for higher-value treatment, analysts said.

Max Healthcare is expected to report a consolidated net profit of INR 4.2 billion, up 48% on year and 36% on quarter, according to the average of estimates from nine brokerages. The company's revenue for the quarter is seen rising 52% on year and 28% on quarter, as per the estimates.

The highest estimate for Max Healthcare's September quarter net profit is INR 4.5 billion from Anand Rathi Share and Stock Brokers Ltd. and the lowest is INR 3.9 billion from Emkay Global Financial Services Ltd. Revenue estimates range from a high of INR 26.9 billion by Emkay Global to a low of INR 25.2 billion from Prabhudas Lilladher Pvt. Ltd. The company is yet to announce a date for the release of its Jul-Sept earnings.

Max Healthcare operates 22 hospitals, many of them in the Delhi-National Capital Region, with a presence also in Lucknow, Mohali, Mumbai, Nagpur, Dehradun, and Bhatinda. It had a total capacity of 5,200 beds as of Jun. 30. The company also operates diagnostic services under the Max Lab brand and at-home healthcare services under the Max Home brand.

The consolidation of a hospital in Noida that was acquired from Jaypee Healthcare Ltd. in November 2024 and the setting up of new hospitals in cities such as Lucknow and Nagpur and in Dwarka in Delhi-NCR are likely to boost overall earnings growth for the quarter, analysts said. However, lower dengue cases compared to last year may have affected occupancy rates as well as average revenue per occupied bed, a key performance metric in the healthcare industry.

Max Healthcare's bed occupancy for the September quarter is expected to have declined to 77% from 81% a year ago, Nuvama Wealth Management Ltd. said. Centrum Broking Ltd. expects the hospital chain's occupancy to fall by about 100 basis points to 80%, with average revenue per occupied bed likely to have edged 1% lower on year to around INR 75,000. The network's occupancy was unusually high in the September quarter a year ago due to the spike in dengue-related admissions. Motilal Oswal Financial Services Ltd. said the growing share of newer hospital units, which typically have lower averages, may offset gains from mature facilities and are likely to keep the average revenue per occupied bed largely flat on year at about INR 76,700.

Max Lab and Max Home are expected to report, respectively, 19% and 22% year-on-year sales growth, Kotak Securities said. Both business units together account for nearly 5% of the company's total sales.

Analysts have mixed views on Max Healthcare's September quarter earnings before interest, tax, depreciation, and amortisation margin. A marginal decline in occupancy may have led to a fall of 100 bps in the EBITDA margin for the quarter, Centrum Broking said. However, Kotak Securities has projected an improvement of 150 bps in the EBITDA margin for the quarter, led by the addition of beds at new hospitals. Analysts' estimates for Max Healthcare's EBITDA margin range from 25.3% to 26.7%. A year ago, the company had reported an EBITDA margin of 26.6%.

The average of estimates from eight brokerages for Max Healthcare's September quarter EBITDA is pegged at INR 6.7 billion, with the estimates ranging from INR 6.4 billion to INR 6.9 billion. Analysts will look for an update from the company on the dispute with insurance companies over tariff revisions. They also expect clarity on the status of ongoing new hospital projects and commentary on improvement in occupancy and average revenue per occupied bed going forward.

Of the 10 research reports on the company available with Informist, seven have a "buy" or equivalent rating on the stock with an average target price of INR 1,351. One brokerage has a "hold" rating with a target price of INR 1,090. The remaining two have a "sell" rating with an average target price of INR 1,095 per share.

The company's stock has fallen over 6% since it announced its June quarter earnings Aug. 13. Monday, the company's shares closed slightly higher at INR 1,186.40 on the National Stock Exchange.

Following are the Jul-Sept earnings estimates for Max Healthcare Institute from nine broking firms, in INR million, in descending order of net profit estimate:

End

US$1 = INR 88.24
 

Edited by Rajeev Pai

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