Max India Limited (MAXIND) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Max India Limited Q2 and H1 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded. I now hand the conference over to Mr. Rajit Mehta, MD and CEO from Max India Limited. Thank you, and over to you, sir.

Thank you very much. Namaste everybody, and a very good morning to all of you. On behalf of Max India, a very warm welcome to each one of you for our Q2 and H1 FY '26 earnings call. Hope all of you had a good festive season and wish you all the best for the year as we approach 2026. Some of you not in Delhi, you are blessed. You're not facing the polluted air that we are facing. So stay away for a few weeks, in my advice. Today, I'm joined by my colleagues, Mr. Ajay Agrawal, the Deputy CEO and CFO for Antara Senior Living and Head of Investor Relations; Sandeep Pathak, who is the CFO for Max India Limited and also Legal Counsel for Max India's all companies as a whole; Mr. Ishaan Khanna, who is the CEO for Antara Assisted Care; Mr. Ankit Kalra, CFO, Antara Assisted Care; Shubham, who is part of our IR team; and our IR and advisers from SGA [indiscernible]. Taking your feedback, we uploaded the results yesterday. So hopefully, all of you got time to review them before the earnings call. Before I start, essentially on a consolidated basis, you can see that revenue has grown 15% on a H1 basis Y-on-Y, compared to H1 last year and on a quarter basis, 6%. It's growth across all verticals, and I will share more details. The other good thing is that all our resident satisfaction scores are holding steady 88%. All our voice of customer scores from Care Homes, Care at Home are constant at 94%, 95% and AGEasy at 86%, which is one more indication of how people are experiencing the Antara brand. This quarter was more about making sure that we are able to strengthen execution. As you know, this year, our aspiration was to scale up exponentially across all business lines, and we have seen steady progress across the business lines. We have laid down the strong foundation on infrastructure capabilities, particularly emphasizing on driving utilization, improving margins, deepening customer engagement and strengthening our ecosystem across the 3 verticals. On the regulatory environment ecosystem front, we have remained quite active in shaping industry standards and policy for Senior Care in India, working with bodies like [indiscernible] . In quarter 2 H1, we received the early adopters award from NABH for Care Homes. As you know, we have been involved with NABH in looking at the standards for Care Homes. Also, we received recognition from HQTS on driving quality culture and products and business and Doon community continues to hold the certificated of excellence audited by Grant Thornton. These credentials are not just badges, but actually reflect our ongoing commitment to compliance, quality and leadership in India's evolving Senior Care ecosystem. As informed earlier, the rights issue of INR 124.23 crores was concluded. It was oversubscribed. Thank you very much for your support. INR 100 crores is supposed to be utilized for Antara Assisted Care and INR 21 crores for general expenses and INR 3 for the rights issue expenses. They are so far utilized against the INR 100 crores allocated to Antara Assisted Care, about INR 24 crores as of September '25. With the success of the rights issue and based on the feedback we received from some of you, we also raised INR 80 crores through preferential issue of convertible warrants. Half of the proceeds of the partial payment, INR 40 crores has already been received. The rest will come next year. This will primarily be used for residence vertical for existing as well as future projects. This ensures that we are well funded for our future growth. We remain committed to deploying these funds quite prudently with clear focus on returns, scalability and long-term shareholder value creation. As of September 30, 2025, our treasury assets sit at INR 310 crores, with a consolidated net worth of INR 467 crores. Coming down to the verticals now on residences for seniors. Our Gurugram intergenerational project 360 is fully sold out. Collections are strong at ITD INR 332 crores with a collection efficiency of an all-time high 99%. As a result, Antara has earned a management fee of INR 27 crores so far, and till September '25, out of which INR 8 crores have accrued in the current financial year. With the success of Estate360 and the overwhelming response we got from customers, we were encouraged to partner in on more project with Max Estates in the same campus that's called E361. That gives us approximately 1.04 million square feet, about 360 units. The project will be launched in 2 phases. Launch of the first phase expected in December '25. RERA has been filed, and we should get the RERA approvals and therefore, launch in mid-December '25. As regards Chandigarh, there's been a setback due to the geopolitical situation in India, the government has reviewed all high clearances, all projects which were within 20 kilometers radius of all important airports. Our project was 20.1 kilometers from the Chandigarh Airport. So that is still not cleared. We are working with the partner to see what else can be done. So no issue in the partnership, but it's a regulatory constraint, unfortunately, given the geopolitical situation. But we have started to then look out for other opportunities in Chandigarh. Despite the fact we've not yet received a rejection, but still we want to keep our options open and also pursuing now opportunities in Bangalore and in the South. At Dehradun, our operations remain cash surplus and profitable with a revenue earned of INR 6.2 crores for the quarter. On Noida Sector 150, ROC is still pending. Let me give an update on that as well. So the matter is lying with the Supreme Court. Our hearing is on the 18th. The Noida Authority in the last hearing has presented 3 categories in Sector 150 and 78, 79, which they want to resolve. We fall in Category 2. The Category 1 hearing was done some time back, and we think there will be some favorable orders, but we haven't got those orders as yet. Our hearing is on 18th, and we are hopeful given the favorable order that Godrej got in the same sector. we should be able to procure the same. So let's see, we are waiting. We've already paid amounts to Noida Authority. All dues have been paid. We've already constructed our responsive obligation of the sports city in proportion. So we're just waiting for the Supreme Court to help us in this matter. The project is, by the way, all ready for possession. You must have seen the photograph in the investor deck. Thankfully, the sales price in the state sector has improved significantly, and we are confident once we receive the approval for the OC and Phase 2, the IRRs will only improve. We remain committed to develop 1.5 million square feet businesses every year. That's our objective, and we will do that. On Assisted Care services, about 490 beds in place now, out of which 340 are operational. 150 beds in Chennai, NCR and Bangalore will be operational by month end. Occupancy importantly, has improved sequentially from 20% in Q1 FY '26 to 25% in Q2 FY '26. This signals the signs of acceptance of the concept of steady growth. The revenue in this segment has gone from -- has grown by 1.3x Q-on-Q and 2.1x Y-on-Y, is now INR 3.91 crores, and we have now served about 3,900 -- 3,000 patients in Care Homes. The Care at Home delivered its highest quarterly revenue, INR 5.2 crores -- INR 24 crores, which is a 1.1x Q-on-Q and 1.3x Y-o-Y in H1, driven by the introduction of higher-margin services for Critical Care and Physiotherapy. While margins in Delhi NCR have remained stable, in Bengaluru, Care Home has started giving positive contribution margin, improving from minus 6% to plus 6% and Chennai also has shown a positive improvement from 1% to 5% in the Care at Home business. Such results give us confidence, the model is working as per plan, now it is for us to keep on executing. The patient volume in H1 crossed 6,300 for Care at Home. On AGEasy, so far, we have served about 5 lakh customers since inception, about 50,000 repeat customers. AGEasy achieved a net revenue of INR 20.9 crores. So we're now already at a monthly run rate of INR 7 crores to INR 8 crores already, marking a 1.5x growth Q-on-Q. The H1 revenue now stands at INR 35 crores, which is about 3.3x same period last year. We have had a 2.4x Q-on-Q growth on the off-line sales of AGEasy products. If you recall, we had said we will now phase out all third-party products only sell Antara label products. So that channel also has taken off now. We now have approximately 85 products with 180 SKUs. We already filed 4 patents in AGEasy for knee, for diaper and nebulizer. For all our top selling -- 10 top sellers, we will now introduce slowly interventions to customize them and create a moat around those products. Our RoAS improved to 2, marking a growth of 1.1x Q-on-Q and 1.3x Y-on-Y, signifying higher marketing efficiency and improved conversion. We launched 14 products in H1 FY '26. 84% of them have a 4+ rating and 64% deliver a gross margin of over 50%. 40% of our sourcing now is only from China, which further improves the GM, the gross margin. We also did some celebrity partnerships, as you know, with Anupam Kher, which improved our conversion rate, our click-through rate on Google. Flipkart now contributes about 12% to 13% of our marketplace. Sales, which is a much higher RoAS. So we are glad on that and conversion growth to 7.5%. And we are in the process of having more and more influencers that we will use for promoting our products. We are now coming up with our Gut Health nutraceutical range. We get launched sometime in November, December. This is being developed in partnership with a company from Mumbai called Wellbeing Nutrition, and we are on track for that launch. So on a consol basis, just to repeat in Q2, we did INR 50.2 crores, reflecting a growth of 6% Y-o-Y. H1, INR 91.5 crores on a consol basis, reflecting a growth of 15%. Our consol EBITDA at negative INR 25.3 crores. The focus continues on cost optimization, high utilization and efficient treasury management. On liquidity, we're at about INR 208 crores. Our net debt of INR 105 crores has been repaid. So this is net of that debt and it is primarily earmarked only for growth. So strategically, as we look ahead, we want to keep on focusing to make sure we do a 1.5 million square feet and sell the units that we will launch, maintaining high service levels, expanding the Assisted Care footprint, target 500 beds operational by November end and then go on to build out the rest over the next 4 years. Scale AGEasy to reach and drive breakeven by early FY '28 or late FY '27. Continued investment in brand, technology, talent and operational excellence, all while safeguarding capital discipline and financial resilience. We are confident that all the building blocks are now firmly in place. Some of the results you can see through the investor deck are now coming out. The sector continues to evolve quite rapidly with more and more players entering. There's strong demand. There's excellent brand credibility for us. You may have seen that many players are now entering the Senior Living segment, including some [indiscernible] as well. So we are glad that at least the entire category gets a push. So that's been our performance so far. I'll stop here and welcome any questions.

[Operator Instructions] Your first question is from Harsh, from Aionios.

So a couple of questions from my end. On the Care Homes and AGEasy bit, excellent numbers. Just wanted to understand what drove the revenue growth out there. And especially in the Care Homes bit, how do we see the occupancy levels going forward given that last 2 quarters, we have seen a sharp uptick out there?

Yes. So I think to answer both the questions, I'll ask Ishaan to add. But on Care Homes, you'll find that as the model matures, the occupancy goes up and more and more beds have come in. So this occupancy will only go up because there is no Care Home as yet, which is on maturity. So this trend we will see for the next 2 or 3 quarters at least of occupancy going up. A lot depends on how we are able to look at our digital customer acquisition journey and our partnership with hospitals and doctors. So we don't see a trend of the occupancy going down. Temporarily, there could be a weather or a seasonal shift that happens sometimes in health care. But apart from that, we see it going up. On AGEasy, as I said, we have already hit a steady rate of about INR 6.5 crores, INR 7 crores, INR 7.5 crores. And we are pushing all button more on efficiency and health metrics now, so that we're able to then reach the profitability we expect in FY -- late FY '27. So that's my answer, but Ishaan can embellish more on this.

Hi Harsh. So the occupancy has moved 20% to 25% quarter-on-quarter. And like Rajit mentioned, there are lots of tailwinds we have now. One of them is also the new beds getting added. There are 2 properties which will go live this month, both -- one in Bangalore and in Chennai, that's going to add to the tailwinds. Besides the digital customer acquisition through digital marketing where we see a lot of opportunity and some green shoots in the last quarter, we're also working very strongly on long-term hospital partnerships, which we feel can help them in the steady increase in occupancy. We've also done a few internal structural changes in building a sharper focus on sales teams around Care Homes, and we've seen some green shoots on that as well. On AGEasy, it's frankly all the 3 channels, marketplaces, our own website, D2C and offline, which are fortunately delivering good results. We had reported last time that due to a meta issue, our D2C channel had taken a back seat. So a lot of those issues are now behind us, and we see strong revenue growth there as well. And like Rajit mentioned on offline, the focus shift to selling only AGEasy products. We are building and focusing on expanding our distribution network through distributor partnerships. And we have now 60 partnerships -- 60 distributor partnerships and presence of AGEasy products around 600 retailers/chemist touch points across North India and now expanding into South.

Understood. Just a couple of follow-up questions. On Care Homes, is it possible to break up between the occupancy between long-term and short-term beds? And on 361, when we say that we plan to launch it in December, does that mean that we start collecting the upfront booking fees from that month itself?

On Care Homes, first on occupancy, yes, such, we do track occupancy individually for each Care Home. And the most mature Care Home right now, which is the Memory Care is closer to 50% occupancy and the newest one, which we have that is Sector 24 is closer to 20%, 25% occupancy. So we do track them individually. I can tell you that.

As regards 361, yes, the moment we start to launch, we'll start receiving the upfront collections and accordingly, our DMPs will start getting approved.

The next question is from the line of Nilesh Jain from Astute Investment Management.

[indiscernible] , I wanted to understand on Care Home side, if you can please explain the unit economics. Maybe you can take an example of Gurugram, which has already been existing for, I think, some time. help me understand some of the other geographies as well.

I'll give you an example of a 100-bedded Care Home, if I can, or a 50-bedded Care Home. The way we look at the model is that it should post going live, I first talk about occupancy. It should take us around 4 to 5 quarters to reach 40% to 50% occupancy and then another 4 quarters from there to go between 65% to 75% occupancy. Our expectation is that in the first 4 to 5 quarters, we should be able to achieve contribution margin 1, that is all direct cost included breakeven. And when we move to the 65%, 75% occupancy is when we should start seeing positive double-digit EBITDA margins from each Care Home.

Okay. So what would be average revenue over bed per day basis we would be charging?

Our ARPOBs are somewhere between around INR 6,000 to INR 6,500. And if you annualize this, we expect that each bed in a Care Home should give us between INR 20 lakhs to INR 22 lakhs annually. ARPOB is average revenue per occupied bed to clarify.

And this you are seeing at INR 22 lakhs as full occupancy?

No, no, this is per bed. At an individual bed basis. A bed going live should give me on occupancy, INR 20 lakh to INR 22 lakh annually.

Okay. Okay. So in terms of cost, what our cost would be sitting below, if you can help me understand the expenses, which would be the major ones?

Key expenses are rent and manpower. Rent is around property to property, will vary between 15% to 18%. Manpower would be around 25% and then food, utility, others would be again around 20%, 25%. And hence, our contribution of 30%, 32% at a steady-state occupancy gets achieved.

Okay. Okay. Sure, sure. That helps. In terms of your other geographies like Bangalore and Chennai, how has been the trend you are seeing in terms of your revenue per bed? Is it similar to what it has been at Gurugram or it's higher?

It is higher, also because the concept of Care Homes is more mature in the southern markets. Also, we do transition care, which we provide critical care support more in Bangalore, and we've seen -- and by nature, the average revenue per occupied bed is higher for transition care patients. So we see an ARPOB of close to around INR 7,000 to INR 8,000 for transition care patients. There's also an element of [indiscernible] which is available to residents that come in for critical care support, which also helps augmenting the ARPOB further.

Sure. So in terms of occupancy right now, just to understand the patient scenario, what all cases people would actually recommend to stay at Care Homes. And where is the traction you are seeing?

So there are multiple use cases. Broadly, I will tell you 3 and then maybe we could go deeper. The 3 products that we have under Care Homes are first Assisted Living. Assisted Living is when seniors who require assistance in activities of daily life, but are not really suffering from a specific acute condition, but just need to be taken care of because either they are living alone or don't have care, and children living separately. They move in and they are normally long term because they need to -- they need help in bathing, moving around, just taking care of themselves, and that falls under the Assisted Living category. The second is Transition Care, which comes from hospitals and doctor referrals because they are pre or post-operative care with slightly shorter [indiscernible] Loss of around 30 to 40 days. would come because either they would have had a knee replacement or there has been a cardiac incident, they need care after that or a neurological episode, again, they need care after admission in hospital. And the third product we have is Memory Care, for which we have one property in Gurugram, where we have seniors who are suffering from conditions such as dementia that move in. Again, we see longer there. Average length stays longer.

Okay. And lastly, on Care Home side before I move on the other part. I just wanted to understand how do you calculate occupied bed days and available bed days?

How do we -- okay. So available bed days is the number of beds that have gone live multiplied by the number of months that gives us the available bed days. And on top of that, the beds that are occupied gives us the numerator.

Okay. So the number we show in the presentation is on monthly basis or on quarterly for the 3 months cumulative? The number which we have reported in our presentation, 6765 occupied bed days.

That's for the quarter.

That's for the quarter. Moving on to Care at Home. Just wanted to understand how is the pricing? Is it on per day basis or is it on a monthly basis? How is the contract customer...

Published on a per day basis. But depending on potentially how -- because every case that we take, we get a medical or a clinical assessment done ahead of that. And each service is a different price. So if we have physiotherapy, nursing care, GBA, critical care, they're all priced differently. Our prices are normally published as again, I'm saying on a per day basis. But beyond the assessment, if there is any long-term support that we feel that's required, we also build packages.

Okay. Okay. So here, I just wanted to understand the unit economics as well.

There's no unit economics at the Care at Home level. It's as a business because these are all service businesses. At this point in time, we are at a 20% contribution margin in Delhi and 6% in Bangalore and similar similar in Chennai. CM1 at this point of time. So that as a business, not as a unit.

And largely, the largest cost here, which is manpower because this is [indiscernible]

The next question is from the line of Shivam, an investor.

First on the resident. We were targeting approximately 1.5 lakh square feet every year. And I feel like we are lagging behind. So how we are approaching this? And second is we are very small in the Care at Home. we are growing at around 20%. So is this below our target or...

Residential, yes, you are right, because the Chandigarh, we are lagging now. So if you would say 1.5 million for 2 years should be 3 million. So we have 0.75 million of Estate360, 1.1 million approximately for Estate361 and 0.4 million of Noida Phase 2. So had this 1.1 million, which was absolutely ready for signing and we have actually engaged a lot of consultants. We have actually cleaned the site, et cetera, also. So this was very much above 3 million. So yes, I agree. This has been a setback for this quarter, but we are very aggressively working, as Rajit sir mentioned in his speech for alternatives. And also, we have opened another geography so that we can -- we don't lose sight of this 1.5 million square feet, and we are confident that we'll be able to recoup this fast.

So 1 million of E360 was already done for this year. So 0.5 million is what we look out for. In the next 6 months, we'll be able to announce project 0.5 million at least?

Correct.

We'll catch up. On the Care at Home...