Krishna Institute of Medical Sciences Limited — Q1 FY26 earnings call

Call held 7 Aug 2025

Management summary

KIMS reported strong top-line growth driven by expansion, but margins faced significant pressure from the operationalization of new units in Thane, Nashik, and Kerala. Management is focused on a heavy expansion phase, with two large Bangalore units (~800 beds) set to commission in Q2 FY26. While mature clusters in Telangana and Andhra continue to grow steadily, the near-term focus is on neutralizing losses from greenfield projects and navigating insurance empanelment delays.

Highlights

  • Total revenue reached ₹879 crores, representing a 26.8% YoY growth and 9.6% QoQ growth.

  • EBITDA stood at ₹200 crores, up 8.5% YoY but down 1.4% on a sequential basis.

  • EBITDA margins compressed to 22.7% from 26.6% YoY, primarily due to losses from new units.

  • Net Profit (PAT) declined to ₹85 crores compared to ₹95 crores in Q1 FY25.

  • New unit losses in Q1 totaled ₹21 crores, with Thane contributing ~₹11 crores and Nashik ~₹7 crores.

  • Net debt as of June 30, 2025, stood at ₹2,020 crores.

  • Company-level ARPOB is targeted to reach ₹50,000-₹55,000 over the next 2-3 years from the current ~₹43,000 level.

  • Bed capacity expanded to 8,000 beds across 25 centers in 5 states.

Concerns

  • Insurance Empanelment Delays

Key financials

  1. Total Revenue ₹879 Cr +26.8%YoY
  2. EBITDA ₹200 Cr +8.5%YoY
  3. EBITDA Margin 22.7%
  4. PAT ₹85 Cr -10.5%YoY
  5. Consolidated EPS ₹1.96 -9.2%YoY
  6. Net Debt ₹2,020 Cr

What they filed

Q1 FY27: revenue up 29.8%, net profit up 11.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue363 348 346 373 430 +18%442 +27%456 +32%484 +30%
EBITDA111 103 109 98 112 +1%128 +24%130 +19%118 +20%
Net profit72 76 94 59 64 −11%72 −5%66 −30%66 +12%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Telangana Cluster
    6% Volume Growth70% Occupancy Target
  • Maharashtra Cluster (Nashik/Thane)
    ₹18 Cr Q1 EBITDA Loss₹9 Cr Thane Revenue (July)
  • Andhra Pradesh Cluster
    ₹25,000 ARPOB

Guidance & targets

Margin

  • EBITDA Margin Margin · FY26 · Medium confidence 22% to 25%
    I think anywhere in the 22% to 25% range is what we are looking at.

    — Abhinay Bollineni, CEO

Revenue

  • Company-level ARPOB Revenue · next 2 to 3-year period · High confidence ₹50,000-₹55,000

    From ₹43,000 today

    I think you should safely assume INR50,000, INR55,000... that will happen once ramp-up in both Bangalore and Thane happen.

    — Abhinay Bollineni, CEO

Profitability

  • Bangalore Units EBITDA Breakeven Profitability · within 12 months · Medium confidence Neutral
    So from there, 12 months, we should positively breakeven in both the facilities in Bangalore. We should at least become EBITDA neutral.

    — Abhinay Bollineni, CEO

  • Nashik Unit EBITDA Neutralization Profitability · end of Q2 FY26 · High confidence Neutral
    But there are some losses from the Nashik unit, which we feel will neutralize by the end of Q2.

    — Abhinay Bollineni, CEO

Other

  • ARPOB Growth (Mature Clusters) Other · Annual · High confidence 4-5%
    I think a healthy 4%, 5% growth on ARPOB is what we should factor in.

    — Abhinay Bollineni, CEO

Risks & concerns

  • Insurance Empanelment Delays

    high

    Full empanelment takes 9-12 months in new clusters, causing patient leakage to competitors who offer cashless facilities.

    Both acknowledged

  • High Debt Levels

    medium

    Net debt has reached ₹2,020 crores due to aggressive expansion, though management plans to use O&M models to mitigate further debt.

    Analyst acknowledged

  • Doctor Onboarding Costs

    medium

    Pre-operative expenses and high doctor costs in new units (like Srikakulam and Bangalore) are dragging down consolidated margins.

    Management acknowledged

Areas of evasion (2)

  • Specific ARPOB for 'Congo' specialties (oncology/cardiology) was not provided off-hand.
  • Peak revenue potential for existing capacity was deferred for later analysis.

Q&A highlights

3 direct
New Unit Losses and Scaling Direct
The combined losses in Q1 is INR21 crores... for Q2, we should have a loss of around INR8 to INR10 crores [from Nashik/Thane]... Bangalore will be another INR10 crore drag for the month of September.

Quantifies the significant margin headwind from the current expansion phase and provides a timeline for when these assets will stop bleeding.

Asked by Damayanti Kerai, HSBC

Insurance Empanelment Delays Direct
It will take us anywhere between 9 to 12 months for full empanelments to be completed... we are losing a lot of patients because they don't want to go through this cumbersome [reimbursement] process.

Highlights a structural risk in new markets like Maharashtra and Bangalore where insurance dependency is high, leading to slower ramp-ups.

Asked by Harish Bihani, Kotak AMC

ARPOB Trajectory and Network Mix Direct
I think you should safely assume INR50,000, INR55,000 [ARPOB]... that will happen once ramp-up in both Bangalore and Thane happen.

Confirms that the entry into high-ARPOB markets like Bangalore and Thane is the primary lever for the company's long-term margin and revenue per bed expansion.

Asked by Rahul Jeewani, IIFL Capital

2 min read 5 chapters

Detailed narrative

Expansion Phase Impacts Near-Term Profitability

KIMS is currently in a high-intensity expansion phase, which resulted in a ₹21 crore EBITDA loss from new units in Q1 FY26. The Thane unit contributed ₹11 crores to this loss, while Nashik added ₹7 crores. Management expects these losses to persist in Q2, with an incremental drag of ₹10-15 crores expected from the upcoming Bangalore units in September. Despite this, the consolidated revenue grew 26.8% YoY to ₹879 crores, showing strong underlying demand.

Maharashtra Cluster Facing Empanelment Hurdles

The ramp-up in the Maharashtra cluster, particularly Nashik, has been slower than anticipated due to delays in insurance and CGHS empanelment. Management noted that insurance/CGHS typically accounts for 60% of volumes in these markets. While the cash business in Nashik has reached ₹7 crores monthly, full empanelment is expected to take another 3-6 months. Thane, however, showed a more promising start with ₹9 crores in revenue for the month of July.

Bangalore Entry to Drive ARPOB Expansion

KIMS is set to operationalize two units in Bangalore with a combined capacity of ~800 beds in Q2 FY26. These units are critical to the company's strategy to increase network-level ARPOB from the current ~₹43,000 to a target range of ₹50,000-₹55,000. Management expects these facilities to reach EBITDA neutrality within 12 months of operation, contingent on reaching 30-40% occupancy.

Steady Growth in Mature Telangana and AP Clusters

The mature clusters in Telangana and Andhra Pradesh continue to deliver steady performance with 5-6% volume growth. While Telangana is operating at high occupancy, the company is adding capacity in Kondapur and Gachibowli to sustain growth. In Andhra Pradesh, the focus is on improving the specialty mix by adding oncology and mother-and-child care, though management admits an ARPOB gap will always exist between AP and the higher-paying Telangana/Maharashtra markets.

Strategic Pivot Toward O&M Model

To manage the high debt levels (₹2,020 crores) and operational bandwidth, KIMS is increasingly looking at the Operations & Management (O&M) model. Currently, units like Sangli and Guntur are operational under this model and have already achieved breakeven. Management believes the O&M model is a 'better model' for future expansion as it requires no capex commitment while allowing KIMS to take a share of the revenue.

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