KIMS - Krishna Institute of Medical Sciences Limited Share Price

In the Q3 FY26 earnings conference call for KIMS Hospitals, management provided an optimistic outlook while addressing operational and financial developments. Dr. Bhaskar Rao Bollineni highlighted a record-breaking quarter, with total revenue surpassing INR 1,000 crores at INR 1,003 crores, showing a year-on-year increase of 2.2% and a quarter-on-quarter growth of 3.9%. EBITDA was reported at INR 204 crores, reflecting a marginal decline due to new unit costs, resulting in an EBITDA margin of 20.4%.

Management emphasized the ongoing stabilization of new units, forecasting that break-even for Thane and Mahadevapura will occur in Q1 FY27, while Electronic City is projected to reach break-even by Q3 FY27. They expressed confidence in average revenue per operating bed (ARPOB), projecting it to normalize around INR 70,000 - 75,000 in Karnataka. The audience was informed that cash and cash equivalents stood at INR 206 crores as of December 31, 2025.

Dr. Abhinay Bollineni also discussed the future expansion strategy, indicating a new hospital in Chennai and exploring further opportunities in Tamil Nadu. They anticipate a capex of INR 500-600 crores for FY27, without additional debt increase, as existing expansions reach completion. Management stressed the continuous onboarding of doctors and potential growth in specialties would drive revenue increases.

Overall, KIMS Hospitals is focused on optimizing existing facilities, maintaining a healthy debt outlook, and strategically expanding in underserved markets.

Here are the major questions and their detailed answers from the Q&A section of the earnings transcript:

1. Question: "Is it possible for the management to provide the occupancy number for Thane as well as two Bangalore assets and also the trajectory for the EBITDA losses for these three units in the coming quarters, especially for quarter 4 and FY '26?"
   Answer: "It may be difficult to provide specific occupancy details as all three assets are still growing. However, we expect to achieve EBITDA positive or neutral status for Thane and Mahadevapuram by the end of Q1 next financial year. Electronic City may take a bit longer due to its later commissioning in December, but we anticipate it will also turn EBITDA neutral by the end of Q3."

2. Question: "Should we consider some normalization in these ARPOBs because this is just the first few quarters of the hospitals getting started or do you think these ARPOBs are maintainable going ahead?"
   Answer: "You should probably discount the numbers a bit, considering we have done a significant amount of transplant work lately. While we have seen ARPOBs over INR76,000, these should stabilize around INR70,000-75,000, similar to the Telangana cluster."

3. Question: "Is there anything to read into volume growth in Andhra and Telangana clusters, and do you expect performance to improve?"
   Answer: "The volume growth in Telangana has shown a healthy 20% year-on-year. Andhra's dip in Q3 was due to a state government strike impacting the Aarogyasri scheme. January shows improvement in revenues, indicating recovery."

4. Question: "Can you update the status on NABH accreditation for Nashik and Thane units and the progress on insurance empanelments?"
   Answer: "The entry level for NABH in Nashik is complete, and Thane's is in the pipeline. NABH is not a prerequisite for insurance empanelment; some progress has been made with the top five insurers, with two contracts closed and the remaining three expected by quarter's end."

5. Question: "Given the rise in ARPOB and ARPP, is transplant the only moving factor, or have other variables changed?"
   Answer: "Both factors have contributed. The high ARPOB markets of Thane and Bangalore, combined with outpatient services and the recent addition of onco services, have increased revenue. However, future growth may need careful management due to varying state performances."

6. Question: "What are your expectations for the Telangana cluster in terms of optimal occupancy in future?"
   Answer: "We aim for an occupancy of 75%-80% in Telangana. Some beds are currently closed for renovations, but this should improve with the commissioning of new beds by the end of next year, thus boosting volume growth."

7. Question: "What's the net debt position as of December 31?"
   Answer: "Our consolidated net debt stands at approximately INR2,850 crores as of December 31, 2025."

8. Question: "How many of the top five insurers have been empaneled for Kerala and what's the timeline for Bangalore?"
   Answer: "In Kerala, empanelment in Kannur is complete, while Kollam is still progressing. For Bangalore, we anticipate it may take an additional 6-9 months to complete this process."

9. Question: "Can you share updates on the upcoming hospitals in Andhra Pradesh?"
   Answer: "Onngol's 50-bed expansion is complete, and Anantapur is expected by the end of March. Our new hospitals in Rajahmundry, Kundapur, and Kompali will also begin commissioning soon."

10. Question: "What are your plans regarding expansion in Chennai and further in Tamil Nadu?"
    Answer: "We've identified underserved micro-markets in Chennai and plan to expand there, potentially considering other Tamil Nadu cities in the future, but currently focusing on Chennai."

Each answer summarizes the key points discussed during the conference call while adhering to the constraints regarding character limits and specifics.