Director's Letter

Dear Shareholders,

I feel privileged writing this letter after completing my first full year as the Managing Director of your Company. Last year, we made a promise to you that we would maintain profitable growth trajectories for our healthcare, health insurance and senior living businesses. I am delighted to report that we have not only delivered on that promise but also made significant strategic advances to strengthen the growth trajectories of our respective businesses.

In this letter, I will specifically cover progress against the key objectives of the demerger, highlights of FY 2017 business performance and key priorities of the operating business in the year ahead.


First, let me recap the key objectives of the demerger of the erstwhile Max India Limited into three separate entities − to unlock shareholder value; to provide you, the shareholders, with the opportunity to invest in a specific and undiluted manner in Max Group’s diverse range of businesses; and to enable sharper focus in each of the operating business.

I am proud to say that we as a Group have made significant progress in each of the above-stated objectives. All the three holding companies, including Max India, have a distinct, engaged and thriving investor base which has helped unlock significant value for shareholders reflecting your confidence in the vision and the potential of each of the holding companies and their businesses.

This is further reflected in the presence of a host of marquee Indian and global financial institutions as key investors across the Max Group, including Goldman Sachs, Reliance Mutual Fund, IFC, Ward Ferry, New York Life, Nomura, Target Value Fund, DSP Blackrock Mutual Fund, Mirae Mutual Fund and L&T Mutual Fund, among others.

The combined market cap of the three entities, as of date, amounts to ₹ 20,650 crore, reflecting a 4x growth from the predemerger market cap of ₹ 5,500 crore.

You will have an opportunity to read more about the progress of the primary businesses of the other two holding companies in their respective annual reports. I will focus on the advances made by the key businesses of your Company – Max Healthcare, Max Bupa and Antara Senior Living in the next section.


Let me review the performance and strategic initiatives undertaken in FY 2017 to strengthen the health of our operating businesses as well as outline the key priorities for FY 2018.

Max Healthcare

Max Healthcare (MHC), Max India’s flagship operating company, reported gross revenues of ₹ 2,567 crore from its network of owned and managed hospitals, representing an 18% rise over the previous year. Profit Before Tax increased by an impressive 141% to ₹ 24 crore. EBITDA stood at ₹ 281 crore, marking a 31% improvement over the last year.

Overall, the company delivered a robust performance, despite multiple headwinds during the year including demonetisation and regulatory interventions. This was attained through consistent efforts to improve the top-line by boosting occupancy levels, lowering patients’ average length of stay (ALOS) and reducing costs by ~₹ 100 crore in FY 2016 and FY 2017 through sustainable programmes without, most importantly, compromising patient safety and satisfaction. MHC has continued to improve its customer satisfaction scores from 58% in FY 2015 to 69% in FY 2016 and now to 73% in FY 2017.

Max Healthcare reported a
in profit before tax in FY 2017

This notable improvement in profitability was supported by significant performance turnarounds at two of MHC’s newer hospitals at Dehradun and Bathinda, as well as at the newly acquired entities − Max Smart Super Speciality Hospital (formerly Saket City Hospital) in Saket, New Delhi, and Max Vaishali (formerly known as Pushpanjali Crosslay) in Ghaziabad, Uttar Pradesh. As an example, Max Smart’s monthly average EBITDA in the second half of FY 2017 improved to ₹ 2 crore from a negative ₹ 0.5 crore in the first quarter, following the hospital’s management contract acquisition in December 2015.

While improving performance in the face of various challenges, MHC has continued to invest in strengthening the long-term health of the company, with patient-centricity at the core of all its efforts. This is clearly reflected in several initiatives and outcomes witnessed during the year, which were either first of their kind in India or first in the history of MHC including JCI accreditation of Max Saket, implementation of i-comply – an e-compliance IT system, successful execution of the RISPACS (Radiology Information System - Picture Archiving & Communication System) – a platform that connects radiology workforce across network and reduces the turnaround time significantly, online tracking of all Hospital Acquired Infections (HAI), and investment in several state-of-the-art equipment. Alongside, the company has continued to seed fresh investment for moving up the care value chain and seeking out innovative out-of-hospital growth opportunities including Pathology (Max Labs), Homecare Initiative (Max@Home) and Oncology Day Care Centres with the first unit opening in Lajpat Nagar in Delhi. All these initiatives have shown solid traction in FY 2017.

From a longer-term perspective, MHC aims to focus on certain priorities. These include investing in and growing alternate and new business lines, primarily Max@Home, Max Labs, Oncology Day Care and the Max Centre for Liver and Biliary Sciences (CLBS) at Max Saket. The company also aims to push forward with the Saket Complex development project in accordance with set timelines. In addition, MHC will continue to closely monitor cash flows and capex for effective Balance Sheet Management especially in the light of external headwinds.

Max Bupa Health Insurance

Let me turn now to Max Bupa, the second operating company which is one of India’s leading standalone private health insurers. In the pursuit of realising its vision of becoming India’s most admired health insurer, Max Bupa has further strengthened its foothold in the Health Insurance sector with an expanding base of around 2.4 million customers across the country serviced through its diverse distribution channels, including a network of 17,000-plus agents spread throughout India. It now ranks as the fifth-largest health insurer in the B2C segment.

In FY 2017, Max Bupa delivered strong results in line with its ‘getting fit for growth’ agenda. It reported Gross Written Premium (GWP) of ₹ 594 crore in FY 2017, representing a robust 25% increase over the previous year. The growth in new sales has been driven by improving productivity through the Agency channel as well as by broadbasing the franchise via expansion of the Bancassurance channel. The Renewal business grew at an extremely healthy clip of 28%, backed by significant improvement in persistency, which improved by 520 basis points over the previous year.

In tandem with these achievements, the company has taken several difficult calls including re-pricing its key products, closing loss-making product lines and changing underwriting grids to preserve the long-term health of the business and improve the quality of the book. These actions have already delivered concrete results that are evident in notable improvements in several metrics including claims, cost, persistency and quality scores.

Max Bupa’s newly forged tie-up with Bank of Baroda (BoB) for distribution of its health insurance products is its largest business partnership by far and among the biggest bancassurance alliances in the health insurance sector. This alliance has given us an opportunity to leverage the bank’s network of 5,400 domestic branches and 60-million customer base in India.

Max Bupa reported Gross Written Premium (GWP) of   594 crore in FY 2017, representing a robust 25% increase over the previous year.

The BoB sales are ramping up at a fast pace, backed by end-to-end technology integration with the bank’s system as well as the deployment of customised yet simple products. Last month, Max Bupa added another bank to its portfolio – South Indian Bank, which will help diversify its geographical footprint and strengthen its presence in South India.

With an undiluted focus on customer experience, Max Bupa has undertaken several initiatives to enhance its digital capability. Its latest technology innovations include tab-based over-thecounter policy issuance to improve the customer experience at points-of-sale and self-service enabled through a state-ofthe-art Customer Relationship Management (CRM) system to provide exemplary customer care.

Most importantly, the appointment of Ashish Mehrotra as the new Chief Executive Officer and Managing Director as well as the strengthening of senior leadership pool across several functions including actuary, distribution, finance and operations have significantly aided the Company’s 'Getting Fit for Growth' agenda over the last two years.

Going forward, Max Bupa has its key priorities clearly laid out for the next year. The first is to drive growth in the Bancassurance channel by scaling up the Bank of Baroda alliance and exploring partnerships with new banks to benefit from open architecture and also with other NBFCs. At the same time, MBHI will invest in expanding its proprietary channels, such as Agency, through cost-effective models for profitable sales growth. In addition, the company will strengthen its product suite to address specific customer needs – both age and disease-related and will customise it for the specific needs of the proprietary channels and partners. Max Bupa will continue to prioritise digitally-enabled end-to-end customer journey leveraging advancements in technology. This would include initiatives such as CRM to improve data quality and lead management, creating an omni-channel experience for customers with a new website, mobile app and content management system, and automating processes to simplify and improve customer experience.

Antara Senior Living

Finally, let me turn to the third operating company, Antara Senior Living, which is pioneering the concept of ‘Age in Place’ through the development of Senior Living communities in India and has marked a very significant year. In April this year, Antara opened the gates of its maiden community of nearly 200 apartments near Dehradun, Uttarakhand, to wide appreciation from its customers, the public and the media. In FY 2017, the Company generated collections of ₹ 78 crore, a growth of almost 100% over the previous year.

In the coming months, Antara’s attention will be on sustaining improvements in sales velocity, maintaining its focus on higher conversions of leads to final sales, employing a sharper concentration on service delivery for its Dehradun residents and finalising the growth strategy and business model for a second Antara community.


The future entails immense growth opportunities in each of our business, something the market has acknowledged and rewarded us for. It is going to be critical for each of our businesses to flawlessly execute their plans and deliver on their growth promise in a profitable way, while carefully navigating through external headwinds. In parallel, as we think 3-5 years out, we will continue to identify and capture adjacent and new frontiers of growth and build capabilities that will be imperative for success in the face of the changing external landscape in the onger term. I am confident that with our talented teams across businesses, we will deliver this with flair.

In April, Antara opened the gates of its maiden community of nearly 200 apartments near Dehradun, Uttarakhand, to wide appreciation from its customers, the public and the media. In FY 2017, the Company generated collections of   78 crore, a growth of almost 100% over the previous year.

In writing this, let me underline that while all three of our businesses are at different stages of development, they continue to be bound by the Group’s legacy of delivering the highest standards of service to its customers while pursuing profitable growth for its stakeholders.

Finally, let me assure you of our deep commitment to you, our shareholders. I also wish to thank all our employees across the Group, our business partners, investors as well as the Government and its various agencies with whom we engage actively on a near daily basis, for their continued support in helping our Company move on to the next stage of its exciting journey.

Warm regards,

Mohit Talwar

Managing Director, Max India Limited