Max Healthcare posted an 18% rise in Q2 revenue to ₹3,055 crore, supported by strong international patient growth and expanded bed capacity. However, policy changes in CGHS impacted oncology revenue temporarily. Investors are closely monitoring how the hospital chain balances this regulatory headwind with its aggressive brownfield expansion pipeline.
Max Healthcare reported a resilient second quarter for fiscal year 2027, with net operating revenue growing 18% year-on-year to ₹3,055 crore. The company’s network gross revenue reached ₹3,219 crore, a 20% increase from the same period last year. This growth was largely driven by a rise in occupied bed days and a significant 33% increase in international patient revenue, which totaled ₹307 crore for the quarter.
Oncology Policy Impact
While the company showed overall growth, it faced a specific challenge in its oncology segment. Changes to the CGHS (Central Government Health Scheme) policy led to the discontinuation of certain high-value chemotherapy drugs. This regulatory shift caused a temporary dip in oncology revenue contributions, which dropped to 21% from 26% of inpatient revenue. Management has indicated that it expects these revenues to normalize by the fourth quarter of fiscal 2027 as operational adjustments take effect.
Expanding Capacity
To drive future growth, Max Healthcare is continuing its expansion strategy. The company added 758 operational beds during the year, bringing the total network capacity to 5,518 beds by the end of September 2026. The company’s board has also approved a capital spending plan of ₹415 crore to add another 209 brownfield beds. These expansions are located at key facilities in Noida, Vaishali, and BLK Max, positioning the hospital chain to accommodate higher patient volumes.
Financial Health and Margins
The company maintained a steady operating EBITDA margin of 26.8%, resulting in an operating EBITDA of ₹820 crore. Despite the costs associated with ramping up new bed capacity, financial discipline remained a priority. Profit after tax (PAT) rose 10% to ₹448 crore. The company’s balance sheet appears stable, with a net debt-to-EBITDA ratio of 1.4x, providing financial flexibility to fund its ongoing infrastructure projects.
Looking ahead, investors are tracking the execution timeline for the newly approved 209-bed pipeline and the company's ability to recover oncology revenues. The performance of adjacent units like Max Lab, which grew 24%, and Max@Home, which saw 37% growth, will also be important to watch as they continue to provide a buffer against potential volatility in the core hospital business.