Max India Limited (MAXIND) Earnings Call Transcript

Ladies and gentlemen, you are connected to Max India Limited Q1 FY '27 Earnings Conference Call. The call will begin shortly. Ladies and gentlemen, good day, and welcome to the Q1 FY '27 Earnings Conference Call hosted by Max India Limited. [Operator Instructions]. Please note that this conference 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. Namaste everybody. Very good morning to all of you. On behalf of Max India Limited we extend a very warm welcome to all of you for the Q1 FY '27 earnings call. Sincerely, thank you for your continued support, your trust, your confidence, which keeps us encouraging to undertake this journey in a very fast evolving sector. Really appreciate your time for joining us today. And let me share a few updates. But before that, I have with me my colleagues, Ishaan Khanna, the CEO for Antara Care Services. Ajay Agrawal, Deputy CEO, CFO Antara Senior Living and Head of Investor Relations; Sandeep Pathak, who is the CFO for Max India and also the legal counsel for Max Group, Ankit who is the CFO for Antara Care, Abhiskek Singh, part of our IR team and Dev Raj from SGA and Rahul as well, our IR advisers. We uploaded the deck yesterday. So hopefully, all of you have had a chance to go through it. I think if I start with what happened in the last quarter, it's been just execution, execution, execution. We've been focused on executing and therefore, you are able to see now green shoots in all parts of the business. I would like to inform you that after a long, long wait, we have now issued open up possessions to all our 340 residents in Antara Noida in the month of June 2026. This is something we have been waiting for. This is a very important milestone in Antara's journey. We'll be operationalizing the first community in NCR. While we have many, many learnings from Dehradun, this is going to be quite different for us as well, 340 units, 200, 300 people moving in the next 30 to 45 days is going to be a vibrant and buzzing community. We raised a demand of about INR 169 crores with the offers of position. INR 30-odd crores were collected within June, but the rest has now come most of it in July and August. As on date, approximately 75% of total deals have been collected. The rest are becoming due now, and we should be able to collect them as well. We have started to already put the team together. There are some people we have seconded from Dehradun to make sure the learnings and the culture of Dehradun, also permeates into Noida and we'll be ready to welcome the residents in a few weeks from now. After that, the focus will now shift to saying that can we go ahead and get the approval for Phase 2, which is where we realize most of our profits, just to remind you, while the average prices at which we sold Noida, between INR 7,000 to INR 10,000 the last deal being INR 11,000 or so. The rates have moved significantly up, and they are in the range of INR 16,000, INR 18,000-plus. So hopefully, when we launch Phase 2, we should be able to realize the profit as well. We continue to focus on growth of other geographies. I know some of you will be waiting impatiently saying, why haven't we announced more growth as we are in the last stages of diligence for a wonderful opportunity in Bangalore. It's about 200-odd units. It's in Bangalore, 25 minutes from the airport in Devanahalli overlooking the Nandi Hills at the back. Potential realization of about INR 900 crores in terms of sales value. We've, in the last stage of diligence now with the developers. So let's see how that goes. Also aggressively working on a beautiful opportunity in Dehradun, we have had a long waiting list. We don't have inventory to sell. We have found a small piece of land. It might be just less than 150 units. But given the sales price we are commanding, the sales value will be again, INR 850 crores to INR 900 crores. So if you look at our 1.5 million square feet ambition, about INR 1,800 crores of value that we should be able to achieve with these two. But we are still working on some more geographies as well. But these 2 are very specifics, so I thought I'll mention them to you. We're also in dialogue with people in Chennai, Chandigarh and Lucknow. But as these 2 will help us meet the commitment for this year. And obviously, we'll provide disclosure in more detail once we execute the definitive documents. The expansion in assisted care is exactly as per plan. The occupancy in 485 beds is gradually increasing and it's giving us confidence to explore further expansion sometime later part of the year. AGEasy is also growing steadily. Whatever issues we have faced with our D2C channel or marketplace is now behind us. And I will share some numbers with you as we go forward. the efforts are to make sure we are able to manage the inventory days given the current geopolitical situation. That is something that come under pressure because of logistics costs and the ships not being available to bring the material from China. But that is something we are focusing on and deploying capital very prudently. We are very clear in our focus in terms of scalability and achieving profitability and demonstrating part to profitability. And I will share some numbers as I go forward to substantiate what I'm saying. If you look at the consol numbers, the revenue grew Q1 FY '27 stood at INR 68.6 crores compared to INR 41.3 crores in Q1 FY '26, representing a Y-o-Y growth of 66%. On a sequential basis, revenues marginally declined, primarily due to the lumpy way the DM income comes to us. The EBITDA loss for Q1 FY '27 stood at INR 25 crores compared to INR 23.2 crores in Q1 FY '26 and INR 6.82 crores for '26. While revenue saw a decline -- mainly due to cyclical impact, the profitability decline was primarily due to the impact of the exceptional DMP received in the previous quarter, reflecting the lumpy nature of this revenue. If I give you some numbers of comparison, if I look at FY '25, '24 and '26, the revenue on consol basis was INR 175 crores in '24, INR 145 crores in '25, INR 190 in '26, so revenue grew. The EBITDA was INR 57 crores in FY '24, INR 139 crores in '25 and INR 121 crores in '26. The reason between '24 and '25 was basically we put up 250 beds and also launched AgEasy. But as you can see now, as the revenue is increasing, the EBITDA losses are now coming down. So this is a demonstration of our commitment to work towards profitability. As of June 30, 2026, the treasury assets in Max India level stood at about INR 21 crores with a console net worth of INR 372 crores. Now coming to residences, starting with Dehradun, the operations continue to be profitable. We continue to focus on deeper engagement with our residents, cost optimization and profitability. Operating revenue was INR 6.2 crores in Q1 FY '27, which is 1.1x Y-on-Y basis. Mildly down by INR 7,00,000 primarily due to club membership, these all cyclical things will catch up. But our operational profit was better INR 0.92 crores, which is up 2.3x 1.2x Q-on-Q driven by continued cost optimization. There were 4 units which were released, which gave us additional revenue approximately INR 1.9 crores in marketing fee. And the community is now fully occupied quite stable Therefore, the growth will be linear in the future. Coming to Gurgaon, which was the first intergenerational project in Gurgaon E360 diverted by MAX estate fully sold out, collection continues to be strong, INR 32.5 crores taking the ITD collection to INR 556 crores with a collection efficiency of 87% from inception till June '26. And Antara has earned INR 47.69 crores of management fee till 30th June '26, out of which INR 3 crores has accrued in the current quarter. The second intergenerational project 361, which we only launched, if you recall, in December, total 360 units. We launched 180 first and then 180 in June. As of June end, the bookings were 154. So April, May, June, the market was sluggish given the geopolitical situation, but it is now caught up. So while we sold only 27 units in Q1 FY '27, in the month of July alone, we sold about 34 units and a similar trend continues in August. So we have caught up the market is getting back to a little bit of normalcy. And therefore, the sales velocity is not totally caught up on that side. Total collections INR 1,08.2 crores, so about 194, 197 units sold so far. On the Antara Assisted Care side, total bed capacity of 458 beds across 8 care rooms in NCR, Bengaluru, in China. We have now completed and relaunched the DLF Phase 2, Gurugram center in July '26, and all the centers are now operational. Happy to report that 5 out of the 8 care rooms are trending as per the operating model, and we are confident that others will also follow the same. And we continue to watch this progress very carefully. The Care Home and services revenues were INR 12.03 crores, up by 1.5x Y-on-Y and 1.1x in Q-on-Q. The Care Homes revenue on a stand-alone basis was 1.3x in Q-on-Q. And the OBDs the occupied bed days went up by 23% on a Q-on-Q basis. Many care rooms, as I said, are showing very good trends. The occupancy Bannerghatta, Bangalore, 41% in Q1 FY '27, up from 37% in Q4 FY '26. Gurugram, 41% from 33% in Q4 FY '26. Whitefield Bangalore 18% from 8% and March, Chennai 12% versus 3% over the same period. So you can now see how the occupancy increasing across the care homes. Our care homes and services have now served about 2,700 patients during Q1 FY '27. And and about 53,000 patients inception. Revenue in the segment rose to INR 12.03 crores, which is 1.5% I said earlier on Y-o-Y basis and 1.1% on a Q-on-Q basis. The voice of customer was steady 84%, in Q1 FY '27 remained stable in July as well, reflecting the consistent quality of care and service delivery. Happy to also report that 4 of our care homes achieved an ever highest ARPOB, which is average revenue per occupied bed day of INR 7,000 plus in June 2026. This is really a testimony that the customers are appreciating our quality services at a higher cost. 3 of the 4 care rooms have shown significant improvement in contribution margins, which now reflects the past profitability. On AGEasy, with a net revenue of INR 19 crores in Q1 FY '27, showing a 1.3x Y-on-Y growth. It was lower than Q-on-Q for INR 23 crores driven basically by a moderation of demand beyond the Q4 peak demand period. As all of us know, March quarter is always higher from a revenue perspective to cover the annual targets, but some of this will get caught up as we go on in the year. The ARR now is tending towards 120 and a monthly run rate of about INR 10 crores in July. The marketplace is INR 6 crores, the ROIs of 3.8 in and at D2C, the exit of 2.6 you can see from the numbers that now we are catching up on the ROIs as well. The off-line channel achieved its highest ever revenue crores growing 18% Q-o-Q basis, a very good response to the newly launched product model wheelchair. The overall ROAS, which is return on ad spend in Q1 FY '27 exit has improved to 2 versus 1.8% in Q4. marking a 10% growth. The SAT index in Q1 FY '27 was 82%. AGEasy now has 112 past launch till day out of which 86 are currently live. We are now also present on quick commerce, which is Blinkit and Zepto, our diaper category, which was the unique Diaper that we had launched, which we have a patent on. Now we are hitting a 1,500 pack sales per day which is really a growth in market share in Amazon over the last 60 days. As you know, this is a unique product. It is the only adult diaper with smart absorption technology, and now they're showing up in our increasing market share as well. Our 4 patents have been granted towards our products, and there are 3 patents which have been filed for senior specific innovative products, reflecting our commitment to innovation. And this really will be the biggest differentiator in the mode that we will have, the more patients we have, the more stronger our products will be differentiated. AgEasy so far has touched about 9 lakh likes it about 88,000 repeat customers and serves a reception achieved an NPS of about 60, which is quite high, but that reflects improving customer stickiness as you use deepens over time. Gross margins for online channels, D2C marketplaces maintained at 45% in Q1 versus 46% despite very challenging geopolitical situations, which have pushed up the COGS for each product. From this quarter, we are over-indexing on brand awareness. We have onboarded Anupam Kher as a brand ambassador and therefore, we did spend some money, which we will see as an expense in the financial submitted to you. But we are seeing the payback as well. In the month of July, the ARR has now picked up to about INR 10 crores. Our conversion rates have improved from 2% to 3.5% and our ROAS has gone up as well. So the brand spend that we did is already showing a payback in the month of July itself. If I was to really consolidate ACS and look at Q1 last year, Q4 and Q1 this year, the revenue was 21%, 32% and 30%, respectively, with EBITDA losse s at 14%, 18.5% and 90%. So despite the brand and despite the cost of goods going up, we've been able to bring down the EBITDA losses or keep them flat with revenue going up quarter-on-quarter. The last update I'd like to give you is on the Antara Integrated wellness clinic. As you know, this is our key differentiator for Residences. We had launched a pilot in Gurugram in our care home to see what is the impact and what is the receptivity of customers, this is a wellness clinic anchored around modern medicine, but combines modalities of Ayurveda, ozone therapy, infrared sauna, nutrition, et cetera. Financially, the net revenue for Q1 FY '27 was INR 15.75 lakhs. This is expected at this stage to be a negative contribution margin is the first quarter only. But we should be able to cover it up as we go forward. On the customer sat scores very high satisfaction, 96%, with average revenue per client of INR 4,000. The footfalls have grown steadily from 199 sessions to 307 sessions in June. It's a rapid increase. And therefore, we'll now focus on spending some marketing money and scaling up this and also making sure we launch this in Antara Noida as the start checking in. On the partnership front, we continue to work with Star Unit IT Life Insurance to integrate senior wellness with financial literacy, cumulating in specialized financial products for seniors and with IIT Delhi on mobility products and well-being nutrition and nutraceuticals and supplements and [indiscernible] on self diagnosis for lung health. Brand continues to gain strong recognition in Antara Senior Care receiving the Visionary Leadership in Senior Living Award at the HT India Real Estate Expo in June '26, pondering our contribution to India silver economy. We also concluded the NABH petition in Benedetta which is quite essential for our TP and insurance. And we have gone through some more infection find and other care homes. So in summary, Q1 FY '27 has been full of action and execution. We remain confident in our underlying trajectory backed by successful handover of position at Antara and Noida, steady sales momentum in Gurgaon and improving occupancy trend in care homes early signs of recovery in the AZ Ros. As we look ahead, we remain committed to profitability. As you said, AGEasy perhaps by January or last quarter this year, will be will be in that zone. And we continue to contain losses to scale up a long to make sure we are committed to our path to profitability. So I'll stop here and welcome any questions that you might have. And thank you once again for joining the call.

[Operator Instructions] We take the first question from the line of Harsh from Aionios Alpha.

Couple of questions from my end. Firstly, a broader question. I just wanted to double click on the EBITDA breakeven by the end of the financial year target. If we could just understand, particularly from the cost angle, what should change in this quarter versus say, Q4 of this financial year. And even from a top line basis, where should one look at, I understand the resi business can be quite lumpy. But just talking about A and care homes, what should that look at broadly speaking, by the end of the financial year. Secondly, on the Care Homes part, I just wanted to understand your thought process as to where do we stand now versus what was the initial plan, especially on the occupancy levels. Reason why I'm asking this is that what -- is there any plans to start adding beds in near future? Have we reached that inflection point?

Yes. So I cannot comment on specific numbers of FY '27 in the future. But when I made the comment on profitability, I meant on AGEasy, which is our commitment. That is one. Care Homes, obviously, since we build out the bed in the last 12 months, they will have to wait out the 8, 10 quarters it takes for the bed to be profitable at a unit level. ASL will continue to be lumpy. So when we get the DMP and external show as an EBITDA positive, right? But that varies depending on the projects we sign in DMP? But to your question, I'll repeat the numbers once again that you're able to see what I'm saying. If we look at our overall consol basis, the revenue has steadily gone up from INR 175 crores to INR 145 crores to INR 190 crores over the last 2 years. The EBITDA losses of INR 57 crores went up to INR 139 crores because we added 250 beds launched AGEasy in that year and then broaden broad 19 down to 121 despite the revenue going up. This trajectory will continue for FY '27 in terms of revenue going up substantially. And EBITDA loss is getting contained because now we are not adding any new beds at this point of time. AGEasy will continue to throw better contribution margins. So as we go in the next and next quarter, you'll find the trajectory to be substantiated. Occupancy, as I said, the OBD bed has gone up by 23%. But if you look at respective Care Homes, Barata from 41% from 37% to 41%, Gurgaon 33 to 41 Whitefield, Bangalore from 8 to 18 and [indiscernible] from 3 to 12 so 5 of the 8 rooms are now trending to the model that we have shared with all of you, respectively, 5 of them, right? The rest is work to do as we go along. But now we are confident. So sometime -- the inflection point, if you recall, was October, November. We say we'll wait till that time and then start making the column and expansion. So we are sticking to that time line. No changes in that as well.

Just to add, Harsh on AGEasy, what are the metrics that you would look at and how that will move to profitability. If you see historically, we've reported minus 80%, minus 70% PM2 for AGEasy. As of July, the marketplace is CMP came down to minus 17%, 17%. And this number for all other channels will continue to improve at the back of improving return on advertising spend, which earlier. And this will be corresponding to better gross margins and higher top line. So that is how the CM2 will keep improving to achieving a breakeven in Q4.

Some of the aberration you see in, for example, employee expenses, right, is basically the -- some provisions getting within that. So each year, we provide for variable pay. But when we pay out in the month of May for Q4, the provisions get trued up, actualized. But once we start Q1, we again start providing. So it's just an accounting thing in terms of provisions, nothing else.

Understood. Just on the blended bed in Care Homes. I understand that the last few bed additions or substantial bettering so RBOB should be between -- once the occupancy rises should be between 6,500 to 7 000. Is that the right way to look at it?

Should be near 7.5, Harsh.

[Operator Instructions] The next question from the line of Nikhil Gupta from Vaayu Capital.

My first question is a bookkeeping question on senior living. So out of the INR 33-odd crores collection we did from the Noida community. What would be the revenue which would have been attributed to the Q1.

So one, the revenue in the Noida will be booked at the SPV level. And since it's a joint venture with us, we will only consolidating the net P&L. Now as regards to the joint venture company, if I asking about the revenue recognition there presenting in June, there has been no revenue ignition because the revenue recession is not linked with collection. It is linked with the possession or registration. So the positions are going to happen in Q2, and that's the year when all the revenue reconditions and inventory write-offs will take place.

Somehow I'm not able to reconcile the numbers. So let's say, so you have mentioned in the investor deck and INR 38 crores from that senior living segment. I believe around INR 8 crores is the treasury income and core operation. So around 6% is there Dehradun, 3 and 4 is from Gurugram community. I'm not able to add that 30 number. Can you please help me that?

Sorry, from where are you seeing the number from the results?

Yes.

So from the results or from the Investor Day?

Both, I mean it's the same thing right?

Residential have 3 components of income, sir. One is the DMCs income what we are getting in Antara Senior. Second is the ops revenue what I'm getting at Antara Purukul. And third is the finance lease income, which I'm getting as a release in Antara Purukul. That amount was approximately INR 15 crores for the quarter. I think that's the gap what you are mentioning is that as -- since it's not a regular income for me, it's always an exceptional because we don't plan for these. Hence, I don't explicitly display this into my gross revenues in my investor release, I just simply say how much release we have done and how much marketing fee have.

Okay. So the DMC is around INR 7 crores. Operation is also around INR 6 crores, INR 7 crores, and the finance is INR 15 crores.

Correct.

And what would be then add odd INR 8 crores, that would be the treasury income at the residents?

Correct.

Okay. Can you help me explain this finance lease, what is this syndrome, like I'm not able to understand this.

So basically, our Atara Purukul is on a lease model, wherein if any units get resold. So if somebody is exiting because of death or they are shifting from -- shifting from Dehradun, and they want to sell their property. It has to be release. So they have to surrender their lease to the company and the company have to release it again. So as per accounting standards, the remaining lease period I have to recognize as a revenue. And against that, I recognize the cost to lease premium and in that particular transaction, we earn some bit of a marketing fee that I account for as an additional revenue in our other income.

Got it. My next question is on our integrated balance. So going forward 3 to 5 years, do you see this segment growing significant -- contributing significant to our P&L? Because in the annual report also, I think we are -- we have mentioned this category as a separate segment. So is it -- can you provide more color that do we think that it can contribute significantly going forward next 3 to 5 years.

See, the AWC is an integral part of our residences. We are not opening a separate business line where we will launch ARCC clinics. We will simply put them in all the residences, so that it's a strong differentiator, very difficult to replicate. It's not just about a doctor or nurse sitting in the campus. It's about a full fledged protocol-based integrated medicine system, which we are launching in the residences. And therefore, all the revenues which come from there, right, difficult to predict at this point of time. But given the volume of people we are handling, let's say, 340 people units in Noida Phase 1 means about 600 people, right? Difficult for me to comment how much revenue we will get, but it's a strong differentiator. We will also try to put them in the Care Homes to be able to work as OPDs to attract footfall, right? So that's the intention really. We are not launching stand-alone clinics.

Understood. The last question is on AGEasy, I think somehow the growth has been slow, but sometimes that happens, that's fine. I think we projected to almost double our revenue from INR 77 crores to INR 150-odd crores. So do you still see that happening because somehow we are still at the INR 18 crores, Q1 revenue seems very, very low. So some thoughts on that.

Ishaan here. Yes, we are still very much on our plan for doubling this year. If you see the year-on-year growth, it is still significantly higher. I guess quarter-on-quarter, there has been moderation but if you look at July numbers, which Rajit quoted, we are already at INR 120 crore annual revenue the INR 10 crore closing number for the month of July, which is not only an improvement in the top line, but it's also complemented with a significant improvement in return on advertising spend, which is what we were working on in quarter 1 to solve so that the next 3 quarters of growth is at the back of a strong base both in terms of our CM 2s and our ROI. So Q2 to Q4, we will see a significant improvement in the top line. As now we have already demonstrated that we can efficiently do it by [indiscernible] .

[Operator Instructions] Next question is from the line of [indiscernible] from MAS Capital.

My question is around AGEasy. AGEasy revenue declined 18% Q-o-Q after the Q4 peak. How much of Q4 was generally seasonal versus demand pull forward through promotions and what should investors consider the normalized quarterly revenue base going forward? And a connected part to the same AGEasy, like you touched 9 live till date, but only 88,000 are repeat customers. So how do you distinguish between top line growth purchase through marketing and genuine customer loyalty? And the last part of that question is what repeat rate and CAC to LTV ratio would convince you that ADG has become a structurally strong consumer brand.

Sure. So I'll let Ishaan answer that. But to your question on quarter-on-quarter there was a transition that we're doing in Q4 last year. right, which causes aberration, but I'll let Ishaan explain that.

I think the one has to be cognizant of a couple of things in the business like AGEasy, which is a products business. Is that 1 there will be 2 impacts that we will see on how this plays through the year. One is that around the festive period, which is depending when it happens, September, October, we will see a significant search, which we saw last year as well. Q3 was a significantly higher number compared or September, October was the peak. We will see that same peak this year as well. And the second seasonality impact that comes -- which does come for products like new caps, nebulizers, diapers is during the winter season where the consumption is higher. So going forward also, I would want to indicate that we will see this. It will not be linear. We will have these spurts during periods of either high purchase during the festive time and then in the winter season. What also happens towards the latter half of the year is that we do -- because we work with marketplaces, there are some big deals, the purchases that they make from us because we believe we're in an closing. So that also happens. And hence, you see that kind of an impact. Will we see that this year? Yes, we will see that kind of seasonality impact and festive impact this year as well. Like I also mentioned that July and August, we have already seen that it's going back to INR 120 crore and now INR 140 crores, INR 150 crores ARR as well. So that trajectory speaking up, giving us the confidence that the guidance we have for this year's revenue for AGEasy should certainly happen.