Max Healthcare's margin rebounds, but a higher tax rate cuts into profit
Revenue growth outpaced expenses in Q2FY27, lifting operating margin sequentially, but profit after tax remained below last year's level because of the tax comparison.
Filed 30 Oct 2026, 14:44 IST · Max Healthcare Institute Ltd (MAXHEALTH)
Key takeaways
- Consolidated revenue grew +20.31% year on year and operating margin expanded by 0.76 percentage points to 27.69%.
- Net profit declined -15.64% year on year to Rs 414.45 cr as the tax rate rose to 23.38% from -10.15%.
- Max Healthcare's 27.69% operating margin was 6.87 percentage points above the 20.82% median for 38 reported healthcare peers.
Price around the results
Revenue growth accelerated in Q2FY27
Consolidated revenue grew +20.31% year on year and +8.58% sequentially to Rs 2,569.21 cr. Expenses rose more slowly, by +19.06% year on year and +5.09% sequentially, allowing operating profit to grow +23.71% and +18.89%, respectively. The sequential improvement marks a rebound after revenue had grown +8.58% in Q1FY27.
Operating leverage was offset by tax and financing costs
Because expenses grew slower than revenue, operating margin widened by 2.40 percentage points sequentially and 0.76 percentage points year on year. Interest expense still rose +36.94% year on year, while depreciation increased +27.32%, limiting the conversion of operating profit into pre-tax profit. The tax rate increased by 33.53 percentage points year on year from a negative base, which drove net profit down -15.64% despite pre-tax profit growth of +21.27%. Other income contributed 7.56% of pre-tax profit, so it was not the main explanation for the quarter's operating improvement.
Margin recovered after the Q1FY27 dip
Operating margin improved from 25.29% in Q1FY27 to 27.69% in Q2FY27, reversing the decline from 28.30% in Q4FY26. It remains above the 20.82% median margin among 38 healthcare peers that have reported the same quarter, with Max Healthcare 6.87 percentage points ahead of that median. The trend therefore shows a sequential rebound rather than a continuing decline.
Historical results reactions have usually been positive
A current post-results stock move is not yet available. Across the last eight results reactions, the stock rose six times and fell twice, with a median absolute move of 1.84%, providing the relevant historical context for the eventual response.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,569 cr | ₹2,366 cr | +8.58% | +20.31% |
| Other income | ₹41 cr | ₹41 cr | +0.94% | +24.32% |
| Expenses | ₹1,858 cr | ₹1,768 cr | +5.09% | +19.06% |
| Operating profit | ₹711 cr | ₹598 cr | +18.89% | +23.71% |
| Operating margin (%) | 27.69% | 25.29% | — | — |
| Interest | ₹74 cr | ₹71 cr | +4.00% | +36.94% |
| Depreciation | ₹138 cr | ₹132 cr | +4.53% | +27.32% |
| Profit before tax | ₹541 cr | ₹436 cr | +23.98% | +21.27% |
| Tax | ₹126 cr | ₹113 cr | +11.57% | — |
| Net profit | ₹414 cr | ₹323 cr | +28.33% | -15.64% |
| EPS (₹) | ₹4.26 | ₹3.32 | +28.31% | -15.64% |
Operating margin of 27.69% compares with a Healthcare sector median of 20.82% across 38 peers that have reported Q2FY27.
What to watch
- Whether operating margin holds above 27.69% after the sequential rebound from 25.29%.
- Whether revenue growth continues to outpace expense growth after rates of +20.31% and +19.06%, respectively.
- Whether the tax rate remains near 23.38% rather than repeating the negative -10.15% comparison from Q2FY26.