Max India announces results for the Nine Months ended December 31, 2008

– Consolidated Operating Revenue at Rs. 3,194 crore, up 49% –

– Assets under Management of Life Insurance Business at Rs. 4,827 crore , up 45% –

– Strengthens corporate governance and management team –

– Accolades across categories received by businesses –

• Gross Premium Income for the nine months ended December 31, 2008 at Rs. 2,703 crore , Up 53%.
• Max New York Life on a significant expansion drive – strength of agents and distribution network more than doubles within a year to 72,000 agents across 555 offices.
• Revenue from network of hospitals for the nine months ended December 31, 2008 at Rs. 314 crore, Up 15%.
• EBITDA from network of hospitals for the nine months ended December 31, 2008 at Rs. 24 crore, Up 82%.
• Max Healthcare to add 5 hospitals over next 3 years, doubling its bed capacity to 1,500 beds.

Max India Ltd. today announced its un-audited results for the quarter and nine months ended December 31, 2008.

The consolidated operating revenue for the nine months ended December 31, 2008 at Rs. 3,194 crore, against Rs. 2,143 crore, in the corresponding previous period grew 49% year-on-year. The overall consolidated revenue for the nine months ended December 31, 2008 at Rs. 3,484 crore against Rs. 2,772 crore in the corresponding previous period, grew 26% year-on-year.

The consolidated operating revenue for the quarter ended December 31, 2008 at Rs. 1,134 crore against Rs. 913 crore in the corresponding previous quarter grew 24% year-on-year. The overall consolidated revenue for the quarter ended December 31, 2008 at Rs. 1,239 crore against Rs. 1,226 crore in the corresponding previous quarter grew 1% year-on-year. The consolidated net loss for the nine months ended December 31, 2008 stood at Rs. 350 crore against Rs. 55 crore in the corresponding previous period. The losses have increased on account of significant expansion being undertaken in the life insurance business. The distribution network has more than doubled within a year – from 233 offices as at December 31, 2007 to 555 offices as at December 31, 2008. The employee strength has also increased from 6,400 employees as at December 31, 2007 to 15,600 employees and the agency base has grown from 30,000 agents to 72,000 agents. This expansion and the growing share of new business premium cause strain on the profitability of the life insurance business.

Life insurance is a long-term contract. As per the accounting norms prevalent in India, the new premiums collected cause a strain on the profitability in the initial years as insurers have to put away a portion of the new premiums collected as reserves, commission and management expenses.

The contract, though, generates free cash flows over a long-term and is therefore profitable on a present value basis. Due to these reasons, the Company has reported consolidated net loss for the quarter ended December 31, 2008 at Rs. 94 crore against Rs. 4 crore in the corresponding previous quarter.

Commenting on the results, Mr. Analjit Singh, Chairman & Managing Director, Max India Limited, said, “The challenging macro economic environment has caused some moderation in the growth of our businesses in the recent quarter, but the robustness and inherent strength of our business model places us in a relatively better position. Our life insurance business continues to outpace the industry growth by a significant margin.” “The expansion of the healthcare business with new facilities at Patparganj, Saket and Dehradun is progressing rapidly towards completion. Our endeavor to provide our businesses with the committed capital to see them accomplish their desired growth objectives remains unchanged,” he added.

Max India also announced important top management changes at its subsidiary Max Healthcare. Dr. Pervez Ahmed has been appointed CEO and Managing Director of Max Healthcare. Accordingly, Mr. Analjit Singh will now retain the position of Chairman of Max Healthcare. Since the last two years, Dr Ahmed, along with Mr. Mukesh Shivdasani, has been a part of the 2-member joint Leadership Team. Dr. Ahmed served as Executive Medical Director of Max Healthcare from 2007-2009 before taking on the current role. He was previously Physician In-charge of ICU and Director of Critical Care Medicine at Brookdale Hospital Medical Centre, New York. Mr. Shivdasani will now move on to focus on Max India Group’s existing and future association with Healthcare Management Education.

This announcement follows the recent orderly management transition of two founding team members of Max New York Life Insurance to leadership roles in the Company. Rajesh Sud was appointed as the Chief Executive Officer and Managing Director and Rajit Mehta as the Chief Operating Officer of MNYL on Nov 1st, 2008.

Besides streamlining and strengthening the top management of its subsidiaries, Max India Ltd. is also strengthening their Board Governance process through the appointment of additional Independent Directors. Noted economist, Dr. Omkar Goswami has been appointed as an Independent Director on the Board of Max New York Life from December 3, 2008 and Max Healthcare is appointing Dr. Ajit Singh as an Independent Director on its Board. Dr. Ajit Singh spent 20 years at Siemens in various roles, most recently as the CEO of the Image & Knowledge Management Business Group of Siemens Healthcare.

Max New York Life (MNYL)

Gross premium income for the nine months ended December 31, 2008 at Rs. 2,703 crore grew 53% year-on-year. Annualized First Year Premium (new sales) for the nine months ended December 31, 2008 at Rs. 1,578 crore grew 43% year-on-year. Premium conservation ratio improved to 85% for the nine months ended December 31, 2008 from 82% in the corresponding previous period. Assets under Management as at December 31, 2008 at Rs. 4,827 crore grew 45% year-on-year.

The Company has over 2.4 million policies in force with around 900,000 policies sold during the nine months ended December 31, 2008. Sum assured in force as at December 31, 2008 over US$ 19 billion (Rs. 940 billion) has grown 49% year-on-year. MNYL has more than doubled its agency strength from 30,000 agents to 72,000 agents. The distribution reach has expanded from 233 offices across 155 3 locations to 555 offices across 364 locations. The shareholders infused Rs. 750 crore as fresh capital in the nine months, taking the total capitalization of the business to Rs. 1,782 crore.

Gross premium income for the quarter ended December 31, 2008 at Rs. 978 crore grew 28% year-on- year. Annualized First Year Premium (new sales) for the quarter ended December 31, 2008 at Rs. 547 crore grew 14% year-on-year. Premium conservation ratio at 80% is in line with the corresponding previous quarter. Over 322,000 policies were sold during the quarter, growing 37% year-on-year.

Net Loss before tax for the nine months ended December 31, 2008 stood at Rs. 410 crore against Rs. 101 crore in the corresponding previous period. Net Loss before tax for the quarter ended December 31, 2008 stood at Rs. 119 crore against Rs. 32 crore in the corresponding previous quarter. The losses for the nine months and quarter ended December 31, 2008 have increased because of the reasons explained earlier in this release.

MNYL has strengthened its distribution channels further through a tie-up with Barclays Finance, one of the leading NBFCs in customer acquisition. Barclays Finance has a network of 119 branches across 49 Indian cities. MNYL has also tied up with 3i Infotech and Mimoza, a large Micro Finance Institution for Max Vijay.

MNYL has received various accolades across categories, some of the significant ones being Golden Peacock Innovation Award 2008 for Max Vijay; Grant of US$400,000 from International Labour Organization (ILO) for Max Vijay; 7th best company to work for in India by Business Today – Mercer Survey; Outlook Money ranks MNYL # 1 in Slow, Medium and Quick fund category; CIO 100 Award for Innovation in Technology Implementation and CII Business Excellence commendation for “Strong Commitment to Excel”.

Max Healthcare (MHC)

Revenue across network of hospitals for the nine months ended December 31, 2008 at Rs. 314 crore grew 15% year-on-year. The average patient transactions per month improved to 160,000 for the nine months ended December 31, 2008 from 135,000 in the corresponding previous period. The average revenue per occupied bed day at Rs. 19,000 improved 3% year-on-year. Average Occupancy across facilities was maintained at 66% and average length of stay improved to 3.3 days. Revenue across network of hospitals for the quarter ended December 31, 2008 at Rs. 103 grew 5% year-on-year.

EBITDA for the nine months ended December 31, 2008 at Rs. 24 crore grew 82% year-on-year. The EBITDA margins improved to 7.5% from 4.8% in the corresponding previous period. The business turned cash positive in the second quarter of the current financial year. Cash profit for the nine months ended December 31, 2008 stood at Rs. 2 crore against cash loss of Rs. 12 crore in the corresponding previous period. EBITDA for the quarter ended December 31, 2008 at Rs. 8 grew 62% year-on-year and the margins improved to 8.2% from 5.3%. The cash profit for the quarter ended December 31, 2008 stood at Rs. 2 crore against cash loss of Rs. 2 crore in the corresponding previous quarter.

MHC received Express Healthcare Excellence Award for Innovative Marketing Practices and Best Managed Healthcare Program for its Health Insurance / TPA Program.

Max Speciality Products (MSP)

Revenue for the nine months ended December 31, 2008 at Rs. 285 crore grew 33% year-on-year. Sales quantity at 21,000 tons grew 25% year-on-year. Revenue for the quarter ended December 31, 2008 at Rs. 80 crore registered a negative growth of 5% year-on-year in line with significant drop in crude prices. The BOPP sales quantity for the quarter ended December 31, 2008 at 7,155 tons grew 7% year-on-year.

Net Profit before tax for the nine months ended December 31, 2008 at Rs. 18 crore grew 23% year-on- year. EBITDA for the nine months at Rs. 38 crore grew 16% year-on-year with margins at 13.4%. Net Profit before tax for the quarter ended December 31, 2008 stood at Rs. 4 crore against Rs. 7 crore in the corresponding previous quarter. EBITDA for the quarter ended December 31, 2008 stood at Rs. 10 crore against Rs. 13 crore for the corresponding previous quarter with margins at 12.8%.

Max Neeman Medical International (MNMI)

Revenue for the nine months ended December 31, 2008 doubled year-on-year to Rs. 10 crore. Revenue for the quarter ended December 31, 2008 at Rs. 3 crore grew 66% year-on-year. Order book as at December 31, 2008 at Rs. 40 crore also doubled within a year. The business development pipeline stood at over Rs. 120 crore as at December 31, 2008.

The business turned profitable in the nine months ended December 31, 2008 and reported a net profit of Rs. 1.0 crore against a loss of Rs. 2.5 crore in the corresponding previous period. The profit for the quarter ended December 31, 2008 stood at Rs. 0.2 crore against loss of Rs. 0.2 crore in the corresponding previous quarter.

About Max India

Max India Limited is a multi-business corporate, driven by the spirit of Enterprise and focused on People and Service oriented businesses. It ‘Protects Life’ through its Life Insurance subsidiary Max New York Life, a Joint Venture between Max India and New York Life, a Fortune 100 company; ‘Cares for Life’ through its Healthcare company, Max Healthcare, a subsidiary of Max India Limited; ‘Enhances Life’ through its Health Insurance company, Max Bupa Health Insurance, a Joint Venture between Max India and Bupa Finance Plc., UK, which is set to launch after statutory approvals; and ‘Improves Life’ through its Clinical Research business, Max Neeman, a fully owned subsidiary of Max India. From its past, Max India continues its interest in Speciality Products manufacture for the packaging industry.

Max New York Life (MNYL) is a Joint Venture between Max India Ltd. and New York Life, a Fortune 100 company. MNYL, incorporated in 2000, is one of India’s leading private life insurance companies. The Company offers both individual and group life insurance solutions. It has established a wide distribution network across India. Through its wide network of highly competent life insurance agent advisors and flexible product solutions, MNYL is creating a partnership for life with its customers in India to help them meet their life stage needs.

Max Healthcare (MHC) is the country’s first comprehensive provider of standardized, seamless and world-class healthcare services. It is committed to the highest standards of medical and service excellence, patient care, scientific and medical education. MHC operates eight centers in Delhi & NCR, offering services in over 30 medical disciplines. MHC has an out patient facility, the Max Medcentre and a Speciality centre focused on Eye and Dental care at Panchsheel Park, secondary care hospitals at Pitampura, Patparganj, Gurgaon and Noida and state-of-the-art tertiary care facilities at Saket in South Delhi.

The tertiary care hospitals at Saket include Max Devki Devi Heart & Vascular Institute, a Centre of Excellence in cardiac services, and the Max Super Speciality Hospital, a super speciality facility in Orthopaedics & Joint Replacement, Neurosciences, Paediatrics, Obstetrics & Gynaecology, Aesthetic & Reconstructive Plastic Surgery and Internal Medicine. In addition, it has an Institute of Allied Medical Services where it provides General and Laparoscopic surgery, Urology, Eye & ENT, Oncology, Nephrology, Dermatology, Department of Mental Health & Behavioural Sciences amongst others. MHC has collaboration with Singapore General Hospital in the areas of medical practices, nursing, paramedical, research and training.

Max Bupa Health Insurance Limited (MBHI) is a Joint Venture between Max India Limited and UK-based Bupa Group, a leading international health and care organization. The Company is headquartered in Delhi and is set to launch its operations in 2009. Dr. Damien Marmion has recently joined as the CEO and the Company is in the process of putting together its top management team.

Max Neeman Medical International (MNMI) is a Clinical Research services provider offering services across the value chain of new drug development to a growing list of Pharmaceutical, Biotech and Clinical Research clients, in India and abroad. MNMI continues to focus on developing alliances with mid sized pharma and biotech companies to transition their drug development work to India. It has an employee base of 200 and five Regional offices in India & one business development office in USA.

Max Speciality Products (MSP) specializes in manufacturing of wide range of sophisticated barrier and packaging films. The BOPP division of MSP has an installed capacity of 29,000 tons per annum. MSP’s leather finishing foil business division manufactures a range of leather finishing and laminating foils.

Disclaimer

This release is a compilation of unaudited financial and other information and has not been subjected to limited review. This may also contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from our expectations and assumptions. We do not undertake any responsibility to update any forward looking statements nor should this be constituted as a guidance of future performance.

For more details contact:

Nitin Thakur

Head – Communications
Max India
Max House, Okhla – III,
New Delhi-110 020
Tele # 2693 3601-10 extn. 196
Cell # +91 9873347428+91 9873347428
E-mail: [email protected]

Rahul Gossian

Communications Specialist
Max India
Max House, Okhla – III,
New Delhi-110 020
Tele # 2693 3601-10 extn. 145
Cell # +91 9873154228+91 9873154228
E-mail: [email protected]