Analyst Concall
Max Healthcare says medical colleges to fetch over 25% returns
This story was originally published at 13:11 IST on 14 August 2026
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--Max Health:See medical education significant line of business in coming yrs
--CONTEXT: Max Healthcare mgmt comments in post-earnings analyst concall
--Max Health: Max Smart Super Speciality Hospital operating at 80% occupancy
--Max Health: Expect strong occupancy for Max Smart Super Speciality
--Max Health: Medical colleges expected to fetch over 25% return on capital
--Max Health: Plan to set up medical college attached to Lucknow hospital
--Max Health: Share of institutional business to come down going forward
--Max Health: Institutional business is a loss making segment
--Max Health: Not seeing any policy risk on expansion plans
--Max Health: Net debt may go up by end of FY27 due to capex plan
--CONTEXT" Max Health net debt at INR 23.84 bln as on Jun 30
By Gunjan Rajput and Narayana Krishna
HYDERABAD/NEW DELHI – Max Healthcare Institute Ltd. expects medical education to become a significant line of business in the coming years and sees returns on capital of more than 25% from the business, a top executive said in a post-earnings analyst call Friday.
"We believe this to be a significant line of business in years to come," the executive said, referring to the company's decision to enter the medical education business. Max Health plans to set up its first medical college at its campus in Lucknow and subsequently expand the business to other hospitals where it has sizeable land parcels. "Our plan is to start one at Lucknow and then maybe come to the other hospitals where we have vast pieces of land," the executive said.
Max Health's entry into medical education follows proposed changes in National Medical Commission regulations that would allow for-profit companies to set up medical colleges. The company sees the move as a natural extension of its existing academic ecosystem. "We have the faculties, we have the curriculums and so on. So, for us, it's very natural, you know, it's almost backward integration for us to get into medical education," the executive added.
The healthcare company posted a consolidated net profit of INR 3.22 billion for the June quarter, up nearly 5% from INR 3.08 billion a year ago. Analysts had estimated the consolidated bottom line at INR 3.95 billion. The company's consolidated revenue rose nearly 17% year-over-year to INR 23.66 billion from INR 20.28 billion, but fell short of analysts' consensus estimate of INR 27.20 billion.
Max Healthcare said the operationalised beds at Max Smart Super Speciality Hospital are already running at around 80% occupancy, with the remaining capacity expected to become operational during the current quarter. "Whatever's been offered is already at 80%," the executive said, adding that it expects good occupancy as the remaining beds come on stream.
The company expects the share of institutional business to decline further and said the segment is loss-making. "The institutional business has never been profitable. It contributes to fixed costs," the executive said. "On an overall basis, it is not a profitable business. It's a loss-making business." The institutional patient bed share stood at 32.3% in the June quarter, compared to 34.1% a year ago.
Max Healthcare said its net debt could rise marginally by the end of financial year 2026-27 (Apr-Mar) as the company continues to spend on its expansion programme and may take loans to finance projects. "We are spending money on the...capex...So I would say whatever cash we generate we will obviously consume that. And maybe we'll also take some loan to finance the projects," the executive said. The company's net debt stood at INR 23.84 billion as of Jun. 30. The company also said it's not seeing any policy risk to its ongoing expansion plans and remains confident about proceeding with its planned capacity additions.
The company detailed its June quarter earnings on Thursday during market hours. At 1252 IST, shares of the company traded at INR 1,001 on the National Stock Exchange, down 1.2%. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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