Max Healthcare Revenue Up 20% as PAT Margin Fell to 14.7%

Max Healthcare reported Q2 FY27 gross revenue of Rs 3,219 crore, up 20% from Rs 2,692 crore a year earlier, while normalized profit after tax increased 10% to Rs 448 crore. Its profit-after-tax margin, calculated on net revenue, declined to 14.7% from a normalized 15.7% in Q2 FY26.

Why did Max Healthcare's revenue grow faster than profit in Q2 FY27?

Max Healthcare's revenue grew faster than profit because growth in operating earnings was followed by higher overheads, depreciation and other costs below operating earnings. Net revenue increased 18% to Rs 3,055 crore in Q2 FY27 from Rs 2,580 crore in Q2 FY26, while operating earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 18% to Rs 820 crore from Rs 694 crore.

The year-on-year profit comparison requires an adjustment for a one-time tax gain of Rs 149 crore recorded in Q2 FY26. After normalizing for that gain, Q2 FY26 profit after tax was Rs 406 crore, compared with Rs 448 crore in Q2 FY27. Reported Q2 FY26 profit after tax was Rs 554 crore, including the gain, while the Q2 FY27 profit-after-tax margin of 14.7% was below the normalized Q2 FY26 margin of 15.7%.

What drove Max Healthcare's Q2 FY27 revenue increase?

Max Healthcare's revenue increase reflected higher inpatient volumes and average revenue per inpatient patient. Inpatient volumes, measured by patients discharged, rose 12% to 98,464 in Q2 FY27 from 87,629 in Q2 FY26. Average revenue per inpatient patient, or ARPP, increased 8% to Rs 2.31 lakh from Rs 2.14 lakh; this measure is based on gross inpatient revenue and excludes chemotherapy, dialysis and radiotherapy.

Outpatient consultations increased 13% to 11.44 lakh in Q2 FY27 from 10.10 lakh a year earlier, while average length of stay remained 3.9 days in both periods. Gross inpatient revenue rose by Rs 405 crore to Rs 2,529 crore from Rs 2,124 crore. Excluding oncology services, gross revenue grew 25% year on year, compared with the 20% increase in total gross revenue.

Capacity increased alongside activity. Operational beds at the end of Q2 FY27 were 5,518, up 16% from 4,760 at the end of Q2 FY26 and 139 above Q1 FY27's 5,379 beds. Delhi generated Rs 1,639 crore of gross revenue in Q2 FY27, with 2,676 operational beds and 79% occupancy, while Uttar Pradesh generated Rs 661 crore with 1,247 beds and the same 79% occupancy.

How did Max Healthcare's specialty and payor mix change?

Max Healthcare's oncology share of gross inpatient revenue fell to 20.9% in Q2 FY27 from 25.7% in Q2 FY26. The presentation attributes the decline to the discontinuation of high-value patented drugs for institutional patients and a reduction in institutional-bed share. Gross inpatient revenue nevertheless increased to Rs 2,529 crore in Q2 FY27 from Rs 2,124 crore a year earlier.

Other specialties accounted for larger shares of inpatient revenue. Orthopedics increased to 11.4% from 10.5%, neurosciences rose to 10.2% from 9.3%, renal sciences, including dialysis, increased to 10.0% from 9.4%, and gastroenterology reached 6.2% from 5.8%. Cardiac sciences accounted for 10.1% in Q2 FY27, slightly below 10.3% a year earlier.

The payor profile also shifted away from institutional revenue. Institutional revenue represented 18.4% in Q2 FY27, down from 21.5% in Q2 FY26, following disempanelment of CGHS and ECHS at certain hospitals. Insurance and corporate revenue rose to 37.3% from 33.8%, international revenue increased to 10.2% from 9.2%, and self-pay declined to 34.1% from 35.5%; the presentation notes that Q2 FY26 insurance share was affected by disruption to cashless services for standalone health-insurer policyholders.

Which costs and margin movements affected Max Healthcare's profit?

Max Healthcare's operating EBITDA margin was 26.8% of net revenue in Q2 FY27, compared with 26.9% in Q2 FY26 and 24.8% in Q1 FY27. Direct costs rose 17% to Rs 1,241 crore, but declined to 40.6% of net revenue from 41.1%. Contribution increased to 59.4% of net revenue from 58.9%, which the presentation attributes primarily to lower material costs, reduced institutional-bed share and a favourable treatment mix.

Indirect overheads rose 20% to Rs 995 crore in Q2 FY27 from Rs 826 crore in Q2 FY26, increasing to 32.6% of net revenue from 32.0%. Q2 FY27 overheads included Rs 17 crore related to Max Super Speciality Hospital, Bhubaneswar. Max Healthcare cited higher healthcare-facility fees linked to international-patient revenue, provisions for aged doubtful debts and people costs associated with commissioned beds at several hospitals.

Depreciation and amortisation increased to Rs 162 crore, or 5.3% of net revenue, from Rs 122 crore, or 4.7%, in Q2 FY26. Max Healthcare linked the increase to capitalization of brownfield projects at Max Super Speciality Hospital Mohali, Nanavati-Max and Max Smart, as well as expansion at Max Super Speciality Hospital Lucknow. Net finance cost was Rs 56 crore versus Rs 41 crore a year earlier, and the effective tax rate was 22.7%, compared with 24.4% in Q2 FY26 and 21.1% in Q1 FY27.

What does Max Healthcare's sequential performance show?

Max Healthcare improved sequentially from Q1 FY27, when operating EBITDA margin was 24.8%. Gross revenue increased 8% to Rs 3,219 crore in Q2 FY27 from Rs 2,982 crore in Q1 FY27, while net revenue rose by Rs 220 crore to Rs 3,055 crore. Operating EBITDA increased by Rs 116 crore to Rs 820 crore, lifting the margin by 2.0 percentage points to 26.8%.

Profit after tax increased to Rs 448 crore in Q2 FY27 from Rs 357 crore in Q1 FY27, and the margin rose to 14.7% from 12.6%. Profit before tax was Rs 580 crore, compared with Rs 472 crore in Q1 FY27 and Rs 514 crore in Q2 FY26. Despite the sequential recovery, Q2 FY27 profit-after-tax margin remained 1.0 percentage point below the normalized Q2 FY26 margin of 15.7%.

Conclusion

Max Healthcare's Q2 FY27 performance combined higher inpatient discharges, ARPP, outpatient consultations and a 16% increase in operational beds with 20% gross-revenue growth. The movement away from institutional and oncology-related revenue coincided with a higher contribution margin, but overheads, depreciation and other costs meant normalized profit after tax rose 10%, below the growth in revenue.

The next disclosed milestone is at Max Super Speciality Hospital, Bhubaneswar, where 80 beds were shut for renovation during Q2 FY27 and a large part was expected to be available by December 2026. The upgrade programme targets six operating theatres, seven intensive-care-unit beds and 37 ward beds by December 2026; the 250-bed hospital reported Q2 FY27 revenue of Rs 38 crore, EBITDA of Rs 4 crore and average occupancy of 52%.