KIMS - Krishna Institute of Medical Sciences Limited Share Price

In the earnings call held on August 7, 2025, management presented an optimistic outlook for KIMS Hospitals, highlighting significant achievements and future expansions. Total revenue for Q1 FY '26 reached INR 879 crores, marking a year-on-year growth of 26.8% and a quarter-on-quarter increase of 9.6%. However, the EBITDA was reported at INR 200 crores, reflecting an 8.5% growth year-on-year but a decline of 1.4% from the previous quarter. The EBITDA margin was at 22.7% compared to 26.6% and 25.3% in the previous year and quarter, respectively.

The management announced the launch of several new units, including a facility in Thane that generated INR 9 crores in July. Two new Bangalore units, with a total capacity of nearly 800 beds, are expected to start operations in Q2, with full empanelment for insurance anticipated to take 9 to 12 months. Additionally, efforts are underway to neutralize projected losses from new units, expected to range from INR 20 crores to INR 25 crores in Q2.

Management indicated a solid pipeline of expansions, aiming for a stable growth trajectory across existing clusters. It expressed confidence in achieving a full-year revenue target, anticipating a consolidated EBITDA margin between 22% to 25%. They emphasized investments in technology and AI to enhance patient outcomes and operational efficiency. Furthermore, the management reinforced its commitment to maintaining quality and affordability while effectively managing the challenges posed by new hospital setups and insurance negotiations.

Q&A Summary from KIMS Hospital Q1 FY '26 Earnings Conference Call

Question 1: Damayanti Kerai from HSBC asked, "How should we see the operations scaling up at the new units, especially Nashik and Thane, and what kind of losses do you expect for this year and FY '27?"

Answer: We have five new hospitals contributing to losses. Nashik's ramp-up is slow due to insurance delays, but cash business performance is decent. We expect Nashik's losses to neutralize by Q2. Thane's ramp-up is promising with INR 9 crores in July. We foresee total Q2 losses between INR 8-10 crores for Nashik and Thane, and around INR 10-15 crores from Bangalore, neutralizing them by spring next year.

Question 2: Rahul Jeewani from IIFL Capital asked, "Can you quantify the combined losses from the new hospitals in Q1 and the incremental hit in Q2?"

Answer: In Q1, we reported combined losses of INR 21 crores from the new hospitals. The incremental hit in Q2 will be an additional INR 5-10 crores due to improvements in some clusters offsetting losses in others.

Question 3: Karan from GE Shipping Family Office probed about their strategy in the Kerala cluster amid existing competition.

Answer: Kerala is broadly serviced, and we've seen good volume growth across our facilities. We focus on regions with unmet demand, deploying strong infrastructure and technology to attract talent which in turn drives patient inflow significantly.

Question 4: Nancy Yadav from Allegro inquired about the net debt number.

Answer: The net debt as of June 30, 2025, is INR 2,020 crores.

Question 5: Abdulkader Puranwala from ICICI Securities asked about the margins in the AP cluster and their guidance on EBITDA margins for the current fiscal.

Answer: The AP cluster saw margin softening due to preoperative expenses at recently commissioned hospitals. For FY '26, we're targeting EBITDA margins in the range of 22%-25%.

Question 6: Harish Bihani from Kotak AMC inquired about insurance empanelment challenges for new units.

Answer: Empanelment issues are common due to tariff negotiations, and it typically takes 9-12 months to complete. We're using intermediaries to facilitate the process, but it remains a complex endeavor.

Question 7: Karan from GE Shipping Family Office asked, "What occupancy level is expected for breakeven in new hospitals?"

Answer: For the new Bangalore facilities, we anticipate achieving EBITDA neutrality at around 30%-40% occupancy within 12 months of operations following full commissioning.

Question 8: Nikhil Mathur from HDFC Mutual Fund asked about the relationship between ALOS and peak occupancy in Telangana.

Answer: We expect to achieve 65%-70% occupancy in the Telangana cluster, which should positively impact our margins and improve EBITDA per bed over time.

Question 9: Bino Pathiparampil from Elara Capital inquired about expansion plans post FY '27.

Answer: While we are focused on stabilizing newly commissioned hospitals throughout Karnataka and Maharashtra, we are exploring opportunities for further greenfield projects and will likely make decisions on expansions in due course.

Question 10: Harith Ahamed asked about the operational status and contributions of O&M units.

Answer: We operate two O&M units: Sangli and Guntur, both of which are performing well and approaching breakeven with monthly revenues around INR 17-18 crores. We have full management control in these units without capex commitments.