Max Financial Services (MFSL) Q4 01/02 earnings summary

Executive summary

• FY02 standalone revenue reached Rs 200.66 crore, with PAT of Rs 9.46 crore; consolidated results showed a net loss of Rs 154.39 crore, including a Rs 78.23 crore policyholders’ account deficit.

• Growth in healthcare, life insurance, clinical research and established manufacturing businesses contrasted with IT-sector weakness and a difficult year for VSAT services.

• Available cash was directed toward growth in capital-intensive healthcare and life insurance operations; no FY02 dividend was recommended.

Financial highlights

• Standalone revenue rose to Rs 200.66 crore from Rs 158.88 crore; PBT declined to Rs 3.38 crore from Rs 7.38 crore, while PAT increased to Rs 9.46 crore from Rs 5.13 crore.

• Standalone EPS was Rs 4.10 vs Rs 2.22; the tax line included a Rs 13.51 crore deferred-tax write-back, contributing to the reported tax credit.

• Consolidated revenue was Rs 344.49 crore; loss before tax was Rs 105.75 crore and net loss was Rs 154.39 crore, including policyholders’ account deficit of Rs 78.23 crore.

• Cash from consolidated operations was negative Rs 35.40 crore; investing activities used Rs 55.07 crore, while financing activities generated Rs 88.24 crore.

Outlook and guidance

• Healthcare’s priority was accelerating growth and reaching cash break-even at each facility; a 212-bed multi-speciality hospital was expected to become operational in 2003.

• Life insurance planned to expand regional presence, infrastructure, product choice and distribution, including group insurance; management aimed to improve operating leverage.

• HealthScribe expected higher volumes and explored healthcare BPO opportunities; further U.S. economic slowdown was identified as a potential headwind.

• Pharma expected to consolidate regulated-market gains; BOPP margins faced potential pressure from Indian overcapacity over the next 2–3 years.