Max Healthcare Institute (543220) Q1 24/25 earnings summary

Executive summary

• Operationalized a new 303-bed hospital in Dwarka, South Delhi, with advanced technology and strong initial traction; launched under O&M contract with financial assistance approved.

• Announced a build-to-suit 250+ bed hospital in Zirakpur (Mohali), Punjab, on a long-term lease, targeting regional expansion and to be developed by FY28.

• Successfully ramped up recently acquired Lucknow and Nagpur hospitals, contributing INR 99 crore to revenue and INR 18 crore to operating EBITDA in Q1, with ARPOB at INR 45,300.

• Completed most post-merger integration activities, expecting further improvements as new clinical teams join and infrastructure upgrades.

• Appointment of Mr. Gautam Wadhwa as Director & Chief Business Officer effective August 5, 2024.

Financial highlights

• Network gross revenue reached INR 2,028 crore, up 18% year-on-year and 7% quarter-on-quarter; net revenue was INR 1,935 crore, up 19% year-on-year.

• Network operating EBITDA was INR 499 crore (net of INR 6 crore one-time pre-launch cost at Dwarka), up 14% year-on-year; margin at 25.8%.

• Profit after tax was INR 295 crore, compared to INR 291 crore in Q1 last year and INR 311 crore in the previous quarter.

• Free cash flow from operations was INR 258 crore, with INR 213 crore deployed towards capacity expansion and upgrades.

• Net cash position stood at INR 66 crore at June 2024 end.

Outlook and guidance

• Substantial improvements expected during the year, especially as integration and upgrades at new hospitals progress.

• Oncology and surgical mix expansion in new units expected to drive ARPOB and profitability higher in coming quarters.

• Dwarka hospital expected to break even within 6-8 months of launch.

• Brownfield expansion plans to double bed capacity in 4-5 years; strong free cash flows and low leverage support future M&A and greenfield projects.

• Expansion plans include a new 250+ bed hospital in Zirakpur, Punjab, to be operational within 48 months, targeting high-growth regions.