Max Healthcare Institute Ltd. aims to add 1,500 beds in the current financial year, driven by aggressive capacity expansion, primarily through brownfield projects, according to Chairperson Abhay Soi.
"Last year, we added about 30% capacity. This year, through our expansion plans, we're adding another 30% capacity," he said in a conversation with NDTV Profit on Wednesday.
"We had 3,500 beds last year. We have 5,000 beds at present," he said. "And by the end of next year, we'll have 6,500 beds. By 2028, we'll be close to 9,000 beds."
From FY26 to FY28, the hospital chain will allocate close to Rs 5,000 crore for capital expenditure, the managing director added.
Soi also explained why brownfield projects were important for Max Healthcare, highlighting that it has a very high return on capital employed. "We will be able to sort of exceed our Ebitda numbers significantly with this.... Brownfields pay rich dividends because the fixed cost is already incurred," he added.
In the next three months, the company will add nearly 1,000 beds across its Mumbai, Mohali and Saket facilities, all through brownfield developments. A further 550 beds will come online in Max Gurgaon by December or January.
The top executive said that Max Healthcare will rely primarily on internal accruals to fund its expansion.
"So, inorganic growth is always sort of hard to pin down. We are quite comfortable going up to two-and-a-half times debt to Ebitda. At present, our debt to Ebitda is about 0.6 times or 0.65 times.
"So, that gives us adequate elbow room to be able to raise funds if we wish to conclude any acquisitions. We did three last year. I am fairly confident that we may just be doing some (acquisitions) this year as well," he said.
Soi said that performance at recently acquired hospitals in Dwarka, Lucknow and Nagpur had been particularly strong. Dwarka achieved near-full capacity within nine months, while Lucknow and Nagpur saw Ebitda growth of 100% in their first year after acquisition. In Nagpur, where capacity constraints have emerged, Max Healthcare plans to add 150 beds, an 80% increase.
He said the average revenue per occupied bed continued to grow at 7.5% for existing hospitals. "And we've seen that in the current year as well."
"This is, of course, aided by a huge ramp-up in international business. It's grown for us by 29% year-on-year this quarter," the managing director said.
He underlined how India is underserved as a market and the opportunities it holds for leading players in the sector, like Max Healthcare.
"The total capacity of all the corporate players put together would be less than 1,00,000," he said. "I was reading a recent report that you require close to two lakh beds."
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