Max Healthcare Institute Ltd. delivered a broadly in-line earnings growth for the first quarter of fiscal year 2027, resulting in a price target hike from Jefferies.
The brokerage has maintained its 'buy' rating on the stock, while raising TP to Rs 1,260 from Rs 1,230. Jefferies outlined that growth was led by Indian Pharmacopoeia (IP) volumes, while oncology drug discontinuation continued to weigh on performance.
Max Healthcare discontinued its high-value patented chemotherapy drugs for institutional patients earlier this year after the Central government capped pricing.
The impact from oncology hit is expected to fade from Dec 2026, according to Jefferies. Similarly, Citi estimates the impact to soften by the third quarter of fiscal 2027.
Additionally, expansion pipeline largely on track, with Max Smart operational and Kalinga Hospital acquisition completed. Some bed additions delayed to FY30, prompting 2-3% cuts to FY27-29 EBITDA estimates by Jefferies.
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The brokerage expects a strong growth in the second half of the current fiscal and 18% EBITDA CAGR through FY29.
Citi also maintained a 'buy' call on the shares, after retaining its Rs 1,240 price target. The key growth driver for the quarter was occupied bed days, as per the brokerage.
Ebitda per bed increased to Rs 71.2 lakh from Rs 68.5 lakh in the year-ago quarter, although it was lower than Rs 73.4 lakh in fourth quarter of the previous fiscal
It highlighted that keeping oncology aside, gross revenue grew 20% year-on-year, while Ebitda margin was struck by new capacity ramp-up costs.
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Max Healthcare Q1 FY27
Max Healthcare reported a 3% year-on-year increase in consolidated net profit to Rs 357 crore in June quarter, compared with Rs 345 crore in the corresponding quarter last year. The company's revenue and operating Ebitda grew 15% each during the quarter, while margins remained broadly stable.
Consolidated net revenue increased 15% year-on-year to Rs 2,835 crore from Rs 2,460 crore. Operating Ebitda also rose 15% to Rs 704 crore from Rs 613 crore. However, the Ebitda margin was largely unchanged at 24.8%, compared with 24.9% in first quarter of the previous fiscal.
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