KIMS growth momentum remains intact as Thane and Mahadevapura units ramp up
Krishna Institute of Medical Sciences Ltd
BUY
₹731
₹722.45
₹800
9.44%
Investment View and Recommendation
Prabhudas Lilladher's November 06, 2026 result update on Krishna Institute of Medical Sciences (KIMS) retains a BUY recommendation, while reducing the target price to Rs 800 from Rs 850.
The broker believes growth momentum remains intact, supported by the ramp-up of the Mahadevapura and Thane hospitals. It highlights the impressive turnaround time of greenfield hospitals in new clusters as evidence of KIMS's execution capability. New leadership hires in Karnataka and Kerala, the company's lean cost structure, and partnerships with local doctors and leadership outside Andhra Pradesh and Telangana support confidence in faster breakeven and operating margins above 25 per cent across Maharashtra, Karnataka and Kerala over the next three to four years.
Q2FY27 Financial Performance
KIMS reported Q2FY27 revenue of Rs 13,444 million, up 39.9 per cent YoY and 5.3 per cent above Prabhudas Lilladher's estimate of Rs 12,765 million. Revenue growth was driven by strong ARPOB across clusters. Consolidated occupancy on operational beds rose to 54.3 per cent in Q2FY27 from 50.2 per cent in Q1FY27.
| Metric | Q2FY27 | YoY / Comparative change |
|---|---|---|
| Revenue | Rs 13,444 million | Up 39.9% YoY; 5.3% above estimate |
| Consolidated occupancy | 54.3% | 50.2% in Q1FY27 |
| ARPOB | Rs 48,300 per day | Up 15% YoY |
| ARPP | Rs 165,000 | Up 10% YoY |
| Inpatient volumes | — | Up 27% YoY |
| Outpatient volumes | — | Up 23% YoY |
| Average length of stay | 3.43 days | 3.58 days in Q2FY26 |
Q2FY27 EBITDA was Rs 2,603 million, up 27.6 per cent YoY and broadly in line with the broker's estimate of Rs 2,620 million. Consolidated operating margin declined 190 basis points YoY to 19.4 per cent. H1FY27 EBITDA grew 22 per cent YoY to Rs 4,837 million, with a 19.2 per cent margin.
Reported PAT was Rs 750 million, up 12.1 per cent YoY and in line with estimates. Adjusted PAT was Rs 618 million, down 8 per cent YoY. The quarter included an Rs 80 million provision for delayed government-scheme receivables in Andhra Pradesh, which the report expects to reverse over the next one to two quarters.
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Cluster Performance
Cluster trends were mixed during the quarter. Telangana EBITDA was flat YoY at Rs 1,706 million, while its margin fell 550 basis points YoY to 25 per cent. Andhra Pradesh EBITDA declined 17 per cent YoY and its margin fell 840 basis points to 19.3 per cent, with new-bed additions affecting margins.
| Cluster | Q2FY27 performance | Key change or observation |
|---|---|---|
| Telangana | EBITDA of Rs 1,706 million; 25% margin | EBITDA flat YoY; margin down 550 bps YoY |
| Andhra Pradesh | 19.3% margin | EBITDA down 17% YoY; margin down 840 bps, impacted by new-bed additions |
| Maharashtra | Revenue of Rs 1,790 million; EBITDA of Rs 290 million | EBITDA improved |
| Thane | EBITDA of Rs 30 million | Turned EBITDA positive from a Rs 80 million loss in Q1FY27 |
| Nashik | EBITDA of Rs 22 million | — |
| Bengaluru | Revenue of Rs 1,106 million; EBITDA loss of Rs 54 million | Loss reduced from Rs 192 million in Q1FY27 |
| Kerala | EBITDA of Rs 105 million | Improved from Rs 75 million in Q1FY27 |
Estimates, Growth Outlook and Valuation
Prabhudas Lilladher has raised FY28E and FY29E sales estimates by 1.5 per cent but broadly retained its EBITDA estimates. It reduced FY28E and FY29E EPS by 4.6 per cent and 4.0 per cent, respectively, due to higher depreciation and interest costs.
| Measure | FY26 | FY29E |
|---|---|---|
| EBITDA | Rs 8,020 million | Rs 16,711 million |
| Operating margin | 20.5% | 23% |
| EBITDA CAGR | 28% over FY26 to FY29E | |
The Rs 800 target price is based on 26 times September 2028E EV/EBITDA.
Key Thesis Sensitivities
- The pace of breakeven in new clusters.
- Progress in margin recovery at Telangana and Andhra Pradesh hospitals.
- Higher depreciation and interest charges.
Disclaimer: This is a summary of a research report published by the broker/research house identified above. The views, recommendations, target prices and estimates are those of the respective broker and do not represent DSIJ investment advice. The summary may be AI-assisted, hence please refer to the original report for complete details, disclosures and risks.
