Max Healthcare is maintaining its strong financial performance, making it a key player in the healthcare industry. The company’s revenue saw a healthy 19% year-on-year growth in the first quarter of this financial year, reaching ₹1,935 crore. This marks the eighth consecutive quarter of double-digit revenue growth. With an occupancy rate of 75%, similar to last year, Max Healthcare continues to perform well across multiple key metrics.
Solid Growth Across Key Performance Metrics
In the first quarter of this fiscal year, Max Healthcare recorded a 3% increase in its Average Revenue Per Occupied Bed (ARPOB), driven by tariff hikes and other factors. When compared to competitors like Medanta, Fortis, and Apollo, Max Healthcare stands out with the highest ARPOB and occupancy rates in the industry. This demonstrates the company’s strong positioning and consistent performance in the healthcare sector.
Expansion Plans to Meet Increasing Demand
Max Healthcare is aggressively expanding to cater to growing demand. The company has launched new health services in cities like Dwarka, Lucknow, and Nagpur. Although the opening of new units has increased incremental costs, it reflects the company’s strategy to tap into underserved regions.
Additionally, the company’s asset-light Strategic Business Units (SBUs) are contributing positively, with Max Lab and Max@Home recording revenues of ₹41 crore and ₹49 crore, respectively, in the first quarter. In response to high occupancy rates, Max Healthcare is focusing on increasing capacity, with both organic and inorganic expansions through mergers, acquisitions, and greenfield projects.
Acquisitions Boost Max Healthcare’s Capacity and Reach
Max Healthcare has been actively acquiring hospitals to strengthen its presence across India. Recently, it acquired Sahara Hospital in Lucknow, which has a 550-bed capacity, and Alexis Hospital in Nagpur, with 200 beds. The company has also announced the acquisition of Jaypee Healthcare in Noida, adding another 500 beds to its portfolio. With plans to increase the total number of beds to 2,600 over the coming years, Max Healthcare is positioning itself for long-term growth.
Moreover, Max has acquired land in Lucknow and Gurugram for future greenfield developments, which will help meet the rising demand for healthcare services. This reflects the company’s commitment to expanding its infrastructure to cater to more patients.
Should Investors Consider Buying Max Healthcare Shares?
Max Healthcare is set to invest ₹1,300-1,500 crore over the next two years, with most of the funding coming from its operating cash flow. The company is sitting on surplus cash, making it easier to finance future expansions without strain. While the company’s performance looks promising with strong revenue growth and high ARPOB, investors might want to be cautious. The estimated EV/EBITDA ratio for FY26 stands at 33 times, which is relatively high, suggesting that the stock could be overpriced at its current level. For investors, it might be wise to wait for a price correction before making any major investments in this stock.
