Max Healthcare's 10,000-bed expansion built with zero debt: MD Abhay Soi

Max Healthcare's ₹6,000 crore plan to add 10,000 beds over four years will be fully funded through internal accruals, says CMD Abhay Soi, outlining a strategy for growth without margin dilution

Abhay Soi, chairman and managing director of Max Healthcare, one of India’s largest hospital chains in revenue, in an interview with Anjali Singh, discusses the outfit’s funding, growth outlook, digital transformation, and strategy to balance expansion with sustained margins. Edited excerpts:

 

Max Healthcare recently announced a ₹6,000 crore expansion plan to scale up capacity by 10,000 beds over the next three to four years. How will this be funded?   

 

Entirely through internal accruals. Last year, our earnings before interest, tax, depreciation, and amortisation (Ebitda) was around ₹2,200 crore, 65 per cent of which translated into free cash flow after tax and maintenance capex. That’s about ₹1,500 crore last year, growing 20-25 per cent annually. So we’re looking at roughly ₹1,800-1,900 crore free cash flow per annum. Over three years, that’s about ₹6,000 crore, enough to fully fund our expansion without taking on additional debt. Our debt-to-Ebitda is low at 0.6-0.7, so we’re comfortably positioned. Every rupee of profit we make is reinvested back into the business to scale capacity, enhance technology, and expand our footprint across high-demand regions.

 

 

Rapid capacity expansion often pressures margins. How do you plan to sustain Ebitda while new hospitals ramp up?   

We added 30 per cent to our capacity last year without margin compression. Even our greenfield project of 300 beds broke even in six months and reached full occupancy within 14 months. At Nanavati, the old hospital is functioning at full capacity, emergency rooms are full, and patients are waiting for single rooms. So the new facility will see a quick takeup. The cost structure is efficient.

 

What are the occupancy rates and average revenue per occupied bed (ARPOB) you are aiming for by FY28?

 

Similar to current levels. Occupancy was 75 per cent last year and rose to 76 per cent despite a 30 per cent capacity increase. We expect similar or higher ARPOB, as most expansion is brownfield and metro-based.

 

You’ve recently completed three acquisitions. How do you identify value-accretive targets amid rising valuations?   

 

We acquired hospitals in Lucknow, Nagpur, and Noida, with each performing as expected. We target a 20-25 per cent return on capital employed within three-four years, regardless of the entry price. Even if the asset is loss-making, what matters is the Ebitda we generate over time. We’ve achieved a turnaround in under a year.

 

How are you evaluating opportunities in Tier-II and -III cities?   

 

India’s demographic and economic trajectory demands health care infrastructure beyond metros. Over the next decade, 15 per cent of India’s population, around 250 million people, will be over 60. Tier-II cities lack quality private hospitals. Our plan is to anchor in metros but expand to about 20 cities, including Lucknow, Mohali, Nagpur, and Dehradun. These will be supported by internal free-cash generation.

 

What about Max Home and Max Labs? Do you see them emerging as standalone verticals?   

 

They’re growing 25 per cent year-on-year organically. Once they reach a critical mass, we’ll spin them off, possibly with bolt-on acquisitions to accelerate growth.

 

Many hospitals are scaling up robotic surgeries. What is Max’s approach?   

 

Three years ago, we had two robots. Today we have 30. Robotic surgeries offer smaller incisions, higher precision, and quicker recovery, so patient demand is strong. About 7 per cent of our surgeries are robotic, and that share is growing 40 per cent annually. In time, most surgeries will be robot-assisted. It’s a global shift, not just a Max phenomenon.

 

How are you addressing the talent gap, given large-scale expansion?   

 

Max is a preferred destination for doctors. All our hospitals are teaching hospitals, with more than 2,000 research papers published in three years. We run the Max Institute of Medical Education to train doctors and nurses. The focus is not just retention but continuous skilling and academic growth.

 

What role will artificial intelligence (AI) play in Max Healthcare’s future?   

 

AI will be core to our operations. We’ve started with radiology, preventive medicine, and hospital administration, especially predictive analytics for bed availability and workflow optimisation. But we’re cautious adopters; in health care, premature adoption can disrupt established processes. We prefer to integrate mature, stable technologies rather than constantly retraining 37,000 employees on new tools.

 

Medical travel to India is rising again. What’s your plan to strengthen international patient business?   

 

Our international patient base, in 145 countries, has been growing 25-30 per cent a year. India’s value proposition is unmatched. A bypass costs $130,000 in the United States, $100,000 in the United Kingdom, $31,000 in Singapore, but $5,000 in India. A bone-marrow transplant here costs $30,000 as against $850,000 in the United States. As India’s image as a safe medical destination improves, medical tourism will only accelerate.

 

Max Healthcare recently crossed ₹1 trillion in market capitalisation. What milestones are you focusing on next?   

 

We don’t chase valuation milestones. Our priority is building India’s health care infrastructure, efficiently and at scale. Doing that creates value for all stakeholders. We’re proud that Max has been rated a ‘Great Place to Work’ four years in a row and is among the BSE’s top 20 companies for governance as rated by proxy advisory firms. That’s what matters to us.

 

What operational growth metrics reflect your current momentum?   

 

Our inpatient bed-days grew 30 per cent last year. We treated around four million patients, nearly ten million people entering our facilities when you include attendants. With another 30 per cent capacity increase this year, that number will rise further. We see it as a privilege: Every incremental bed means more patients served.

 

You mentioned technology as a differentiator. How deeply is it integrated into hospital operations?   

 

Every process is digitised. We have a command-centre dashboard tracking every patient’s journey check-ins, waiting times, diagnostics scheduling, and more. If a doctor’s surgery runs long, our call centre informs waiting patients or reschedules their slots in real time. The system was coded in-house and reflects our belief that hospitals must be responsive first, then outcome-focused, and finally fiscally disciplined.

 

Finally, what defines success for Max Healthcare?   

Success is being able to treat 30 per cent more patients every year while remaining efficient and ethical, and trustworthy. We’re not selling cookies; we’re treating people. That’s the true measure of growth for us.