Max Healthcare Institute’s stock dropped as much as 7% on Friday following the hospital operator’s revelation of a poorer-than-expected March quarter performance, with sales and earnings falling short of street projections and margins being strained by rising clinician expenses.
Before reducing some losses later in the session, the stock fell to an intraday low.
Revenue Growth Misses Street Expectations
Max Healthcare recorded sales of Rs 2,541 crore for the fourth quarter of FY26, up 10% from Rs 2,326 crore for the same period the previous year. Analysts had predicted sales growth of about 14%, thus the amount fell short of their forecasts.
Although net profit increased by 3% year over year to Rs 387 crore from Rs 376 crore, it fell short of market projections of Rs 416.9 crore.
Margins Under Pressure Due To Rising Clinician Costs
Throughout the quarter, operating performance continued to be under pressure. Due to growing expenses, the EBITDA margin shrank to 26.8% from 27.2% a year earlier. Still, the margin exceeded the 25.2% that the Street had anticipated.
The company blamed a decrease in its oncology business’s contribution for some of the deterioration. Due to the discontinuance of certain chemotherapy medications for institutional patients, oncology accounted for 21% of revenue during the quarter, compared to 26% a year earlier and 24% in the previous quarter.
Profitability was negatively impacted by the 230 basis point annual increase in clinician costs, which also contributed to the decline in margins.
EBITDA per operating bed increased from Rs 71.3 lakh in the December quarter to Rs 73.4 lakh during the quarter, compared to Rs 73.9 lakh in the same period last year.
Ancillary Businesses Continue Strong Growth
Ancillary businesses produced strong growth despite the hospital business’s weaker performance. Max Labs’ revenue climbed 14% year over year to Rs 52 crore from Rs 46 crore, while its EBITDA margin grew to 17% from 14% a year earlier and 13% in the preceding quarter.
Max@Home, the company’s home healthcare division, saw a 30% increase in sales to Rs 73 crore from Rs 56 crore in the same quarter last year and Rs 68 crore in the three months prior, continuing its robust development trajectory.
