Medi Assist Healthcare Services Ltd Q1 FY27 Earnings Call Summary

Event Participants

Executives

3 Sandeep Daga (CFO), Satish V. N. Gidugu (CEO & Whole Time Director), Vikram Jit Singh Chhatwal (Chairman & Whole Time Director)

Analysts

7 Dheeraj Aswani, Manjeet Buaria, Navid Virani, Prakash Kapadia, Sandeep Kothari, Sukrit Deep Patel, Vikas Sharda

Financials & KPIs

Geographic & Segment Commentary

Group: Largest segment (70.2% of revenue) grew 25.5% YoY to ₹166 crore, with premiums up 29.5% and market share at 37.6%. Retention of 90.2% reflects post-acquisition Paramount transition, portfolio rationalization, and revenue-recognition base effects; same-store growth held at ~7-8% blended, with IT companies slower and non-IT faster. Management expects retention to normalize toward historical 93-94% levels.

Retail: Revenue grew 30.1% YoY to ₹23.4 crore (9.9% of revenue), but PPA-model retail premiums of ₹521 crore understate actual participation; platform-administered retail premiums reached ₹4,254 crore (~29%+ market share). As insurers adopt their own digital interfaces, Medi Assist increasingly runs backend and claims operations via technology, making "retail + technology" the more accurate measure of market share.

Government: Revenue grew 35.3% YoY to ₹28.5 crore (12% of revenue), servicing 31 crore members across 12 states and 4 union territories. Schemes are becoming performance-driven with measurable KPIs and predictable payments; collections are among the safest, coming from state and central governments. Management applies the same quality-of-revenue bar as other segments and evaluates schemes continuously.

International: Revenue declined 5.2% YoY to ₹10.1 crore (4.3% of revenue) due to temporary softness in student, leisure, and marine volumes. Ownership in the international vehicle was increased to 91.75% post-Q1; first technology deployment contract went live in Thailand on 1 July 2026, with multiple corporates onboarded. Contracts with retail insurers cover over 50% of India's travel premiums; Q1 performance is not reflective of capability, with yields multiple times the Indian business.

Technology SaaS: Revenue grew 55.5% YoY to ₹7.8 crore (3.3% of revenue). The AI-led stack spans payer (Matrix), provider (Magnum), and fraud (Maven) solutions, now deployable standalone; 47 insurers contracted across combinations, including all AI components. First outcome-based contract signed with compensation tied to population-level outcomes delivered.

Company-Specific & Strategic Commentary

TPA Transformation & Paramount Integration: Integration is at "logical closure" - 95% of group claims and 80% of retail claims migrated to the Matrix platform at end-Q1, with the balance targeted for Q2 FY27. EBITDA margins improved 320 bps from the Q2 FY26 trough, and the near-term retention tax is expected to fully normalize through FY27.

Leadership Strengthening: New Chief TPA Officer and Chief Technology Officer (designated SVP) onboarded to drive transformation and data/AI deployment; leadership team positioned to leverage proprietary technology for retail business scale.

Technology Platform Evolution: Built in-house and funded from operating cash flows (₹24.5 crore AI investment over 6 quarters). Intelligent Document Processing (IDP) eliminates disjointed claim document interpretation; MavenGuard delivered ₹480 crore fraud savings in Q1. Platform now serves as health benefits administrator for the NPS health scheme - integrating pension fund managers, CRAs, insurers, and network cashless services in real time - demonstrating generic platform capabilities applicable outside India.

International Expansion: Ownership increased to 91.75% in the international subsidiary; Vikram Chopra (former Chief Business Officer) appointed full-time to lead and transform the international business. Thailand contract live from 1 July 2026; pipeline extends beyond traditional IPMI into technology and network solutions.

Governance: Dr. Vikram Jit Singh Chhatwal will transition from executive chairman to non-executive chairman at the AGM on 8 September 2026, separating board leadership from executive management in line with institutional-ownership best practice; he remains chairman and strategy remains unchanged.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Execution Priorities & Risk Management

• Question: What are the top 2-3 execution priorities and biggest risks in the next few quarters? (Sukrit Deep Patel)
• Answer: Priorities are: (1) transforming the India TPA business to be leaner, more efficient, more technology-driven and digital self-help; (2) converting the technology pipeline (insurers, brokers, corporates in India and outside) into a playbook execution engine contributing to growth and margins; (3) building the international business with long-term models beyond IPMI. Technology deployment aligns with regulatory intent on policyholder protection - e.g., prediction models estimate out-of-pocket at admission, allowing patients to pay estimated amounts and walk out, with the cashless process handled between payer, TPA, and provider. (Satish V. N. Gidugu)

Balance Sheet & Collections

• Question: Key financial risks and measures for margins, cash flow, and balance sheet strength? (Sukrit Deep Patel)
• Answer: Paramount integration is the first priority; technology migration drove 320 bps margin improvement over four quarters, with a very insignificant portion still pending, expected to complete in one quarter. Balance sheet focus is reducing receivables through faster collections - DSO improved 4.5% YoY on a higher receivables base. (Sandeep Daga)

Government Business & Margin Recovery

• Question: Does government business strain working capital, and is FY27 a record profit year? Will EBITDA margins get back to 23%? (Prakash Kapadia)
• Answer: Government schemes are evaluated for growth, contribution, and margin characteristics; collections are the safest (state and central governments) with performance-driven KPIs and predictable payments; no elongated working capital cycle. Historical margin ~23% and Q1 FY26 pre-Paramount was 22%; immediate order of the day is finishing Paramount integration and getting back to ~23% through FY27. No adjusted EBITDA margin is provided for growth business investments, which are funded from own cash flows. (Satish V. N. Gidugu)

Technology Operating Leverage

• Question: When do technology investments translate into operating leverage and monetization? (Prakash Kapadia)
• Answer: Technology plays a central role in all three lines: (1) TPA business - more self-help and digital member access reduces costs; (2) technology business itself - revenues growing 55% YoY with margins potentially double the usual TPA margins; (3) international - first contract outside India using India-developed/tested technology, with yields and margins far superior to the Indian market; the funnel is promising. Scale of the business is fully supported by technology investments; acquired TPAs operate at far lower EBITDA margins. (Satish V. N. Gidugu)

Retail Business Trajectory

• Question: Traditional TPA retail seems plateaued but technology is growing fast - how to interpret retail trajectory? (Navid Virani)
• Answer: The traditional PPA model is not going away; the PPA label only applies where Medi Assists' name is on the policy contract and it is formally introduced to the policyholder. Insurers with their own digital interfaces can still have Medi Assist run all backend operations through technology integrations. Best to look at total retail market accessed (traditional TPA + platform model); retail plus technology revenues provide a reasonable read on improving retail market share. (Satish V. N. Gidugu)

Overall Business Growth

• Question: How should one think about overall growth (mid-teens?) given Paramount is now in the base? (Navid Virani)
• Answer: Core business will grow at par or faster than the market in group and retail; government remains opportunistic but a meaningful contributor from scale/revenue perspective. Technology will grow much faster (55.5% YoY demonstrated from a 3.3% revenue base); international Q1 is not reflective of capability - Thailand technology contracts live, retail insurer contracts cover over 50% of Indian travel premiums, cashless capability in 180 countries, with yields multiple times the Indian business. (Satish V. N. Gidugu)

Organic Growth & Outcome-Based Contracts

• Question: What is organic growth for the group TPA business, and how do outcome-based contracts work? (Manjeet Buaria)
• Answer: Complex to isolate standalone given acquisitions and trailing base revenues; retention is the proxy (~90% vs historical 93-94%), same-store growth ~7-8% blended (higher outside large IT, lower within IT), and new business adds seasonality - best seen over trailing four quarters. Outcome-based contract specifics not shared, but compensation is tied to outcomes delivered in the population of use. (Satish V. N. Gidugu)

PSU In-House TPA Risk

• Question: Is there a risk of premiums migrating to PSU's in-house TPA entity? (Dheeraj Aswani)
• Answer: Every insurer has some in-house and some TPA work; distribution varies by product and line of business. Regulatory provisions allow policyholders to choose their TPA where the insurer has a relationship, and delivering well gives the right to win. Even insurers with in-house operations are benefiting from component technologies. Retention at 90% reflects mixed portfolio, annual contract cycles, and Paramount onboarding; a breakdown of retention drivers is not provided. (Satish V. N. Gidugu)

NPS Vatsalya Opportunity

• Question: What is the NPS health benefits scheme, what is the potential, and what is our role? (Sandeep Kothari)
• Answer: NPS subscribers can allocate a portion of their corpus toward health expenses and draw down in real time from pension accounts for out-of-pocket costs, automatically triggering other insurance coverage; the platform aggregates funding across NPS accounts, cash, and insurer payouts. Medi Assist acts as health benefits administrator - a technology platform connecting members, record-keeping agencies, pension funds, insurers, network, and payments. Potential is platform revenues plus incremental insurer revenues; the scheme is formally notified, with hope to extend to a substantial part of NPS membership. (Satish V. N. Gidugu)

Technology Sales Cycle

• Question: What is the pushback from insurers when selling the technology platform? (Sandeep Kothari)
• Answer: No pushback per se; every insurer has different workflows, ePass, and claims processes. Conversations, contracts, and POCs are running with half of the insurers. The cycle length is driven by understanding how the technology integrates into existing processes - Matrix deployment is seamless for core-system adopters; for those unable to move from legacy core systems, additional effort is needed to plug into workflows. Proofs of concept validated for both scenarios. (Satish V. N. Gidugu)

Group PSU Growth vs Industry

• Question: PSU group premium growth was 28.9% - 30% higher than industry; does that imply industry PSU group business declined? (Vikas Sharda)
• Answer: Share of wallet improved in both PSU and private sectors. Industry group health insurance grew ~14% in the quarter, with PSUs down 10.5%; given the segment is predominantly employer-employee, the improvement reflects genuine market share gains. (Satish V. N. Gidugu)

Key Takeaway

Medi Assist delivered a solid Q1 FY27 with total income of ₹247 crore (+24.9% YoY) and operating EBITDA margin expanding to 20.3% - a 320 bps improvement from the Q2 FY26 trough on Paramount integration progress. The group engine grew 25.5% with 37.6% market share, while technology SaaS revenue surged 55.5% to ₹7.8 crore (3.3% of revenue) with 47 insurers contracted and the first outcome-based contract signed; international revenue dipped 5.2% on temporary travel volume softness despite the Thailand go-live on 1 July 2026. Strategy centers on completing Paramount migration in Q2 FY27, restoring EBITDA margins toward the historical ~23% by end-FY27, scaling technology/international platforms (including the NPS health benefits admin role) to become meaningful growth and margin contributors, and maintaining ~90% retention through portfolio rationalization. Watch points include retention normalization, PSU in-house TPA dynamics, and converting the substantial technology and international pipeline into sustained contribution.