Krishna Institute of Medical Sciences Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

KIMS reported a quarter of strong top-line growth driven by volume expansion and new facility commissioning, though consolidated margins faced significant pressure from the initial losses of 4-5 new hospitals. Management remains confident in a 12-month breakeven timeline for new assets, with Thane and Bangalore expected to lead the margin recovery. The core clusters in Telangana and Andhra Pradesh continue to deliver steady performance with sustainable margins in the 25-30% range.

Highlights

  • Total Revenue reached ₹965 crores, a growth of 23.3% YoY and 9.8% QoQ.

  • EBITDA stood at ₹208 crores, declining 6.7% YoY due to the drag from newly commissioned hospitals.

  • EBITDA Margin compressed to 21.6% from 28.5% in the previous year's quarter.

  • PAT reported at ₹72 crores, down from ₹121 crores in Q2 FY25.

  • IP volume grew by 15.3% YoY to 64,288; OP volume surged 25.1% YoY to 5,92,725.

  • Average Revenue Per Occupied Bed (ARPOB) stood at ₹42,016, with management targeting ₹50,000 in 8 quarters.

  • Thane unit occupancy reached 80-90 beds in October, with breakeven expected in the next 2 months.

Concerns

  • EBITDA Erosion from New Assets

Key financials

  1. Total Revenue ₹965 Cr +23.3%YoY
  2. EBITDA ₹208 Cr -6.7%YoY
  3. EBITDA Margin 21.6%
  4. PAT ₹72 Cr -40.5%YoY
  5. EPS ₹1.67 -37.7%YoY
  6. ARPOB ₹42,016 +9.8%YoY

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

  • Andhra Pradesh Cluster
    28% EBITDA Margin25% Sustainable Margin Range
  • Telangana Cluster
    50% Occupancy9% Revenue Growth
  • Specialty Mix (Revenue)
    17% Cardiac Sciences14% Orthopaedics11% Neurosciences

Guidance & targets

Margin

  • Consolidated EBITDA Margin Margin · next 2-3 years · Medium confidence 27-30%
    we will continue to do about 27%, 30% kind of EBITDA margin over the next at least say, 2 or 3 years.

    — Sachin Ashok Salvi, CFO

Revenue

  • ARPOB Revenue · next 8 quarters · High confidence ₹50,000

    From ₹42,016 today

    it can go up from the current INR40,000 to INR43,000 to almost INR50,000 over the next 8 quarters.

    — Abhinay Bollineni, CEO

Profitability

  • Thane Unit Breakeven Profitability · next 2 months · High confidence ₹15 crores monthly revenue
    we will break even in the next 2 months based on how things are going in the last few months... typical breakeven, we are seeing it will be around INR15 crores.

    — Abhinay Bollineni, CEO

  • CGHS EBITDA Growth Profitability · FY27 · Medium confidence ₹10-12 crores
    we are expecting INR1.5 crore growth in revenue per month and 60% of that is around INR90 lakhs, so around INR10 crores, INR12 crores of EBITDA growth for the next financial year.

    — Abhinay Bollineni, CEO

Capacity

  • Kondapur Bed Expansion Capacity · Q1 FY27 · High confidence 770 beds

    From 220 beds today

    550 will be incremental. So total will be around 770 beds.

    — Abhinay Bollineni, CEO

Risks & concerns

  • EBITDA Erosion from New Assets

    high

    New hospitals are currently incurring EBITDA losses of ₹20-30 crores each during the ramp-up phase.

    Management acknowledged

  • Regulatory Delays in Licensing

    medium

    Delays in getting permissions for the PES hospital in Bangalore and the CGHS license in Nashik are impacting commissioning and ramp-up timelines.

    Both acknowledged

  • Insurance Empanelment Ambiguity

    medium

    Delays in empanelling with top insurance companies in new markets like Nashik and Thane could slow down volume growth.

    Analyst acknowledged

Areas of evasion (1)

  • Specific profitability by specialty (Cardiac vs Ortho vs Neuro) was deflected as they track at hospital level.

Q&A highlights

3 direct
EBITDA and PAT Degrowth Direct
We have commissioned almost 4, 5 new hospitals, which are yet to break even and because of which the revenue ramp-up in those hospitals are happening, but haven't reached EBITDA breakeven.

Explains the disconnect between strong revenue growth and declining profitability due to expansion costs.

Asked by Piyush Kumar

Nashik Ramp-up and CGHS License Direct
Nashik unlike what is happening in Thane and in Bangalore, 35%, 40% of the hospital business in these hospitals in this cluster comes from CGHS... we should get that license income tax certificate over the next -- we're hopeful we should get that in the next 2 months.

Identifies a specific regulatory hurdle (CGHS license) as the primary reason for slower ramp-up in the Nashik market.

Asked by Rahul Jeewani

Kondapur Expansion and Cannibalization Direct
I don't think both Gachibowli, Kondapur have very different catchments. Though they are only 4 kilometers apart, the catchments are very different for each of these hospitals. I don't see any cannibalization.

Addresses investor concerns about over-capacity in the Hyderabad market as KIMS adds 550 beds to the Kondapur unit.

Asked by Kunal Randeria

2 min read 5 chapters

Detailed narrative

Expansion Drag Hits Short-Term Margins

KIMS is currently in a heavy investment phase, having commissioned 4-5 new hospitals in the last year. This expansion added nearly 3,000-4,000 beds of capacity, which management expects to ramp up over the next 4-5 years. While revenue grew 23.3% YoY to ₹965 crores, EBITDA margins fell to 21.6% as these new units are currently EBITDA negative, losing between ₹20-30 crores each. Management maintains that these assets will reach breakeven within 12 months of commissioning.

Thane and Bangalore Lead the Recovery

The Thane unit is showing strong early traction, with 80-90 beds occupied in October and a breakeven target of ₹15 crores monthly revenue expected within the next two months. In Bangalore, the Mahadevapura facility is already performing ahead of expectations, completing its first liver transplant within 45 days. The PES Bangalore unit is awaiting final licensing, with commissioning expected in December 2025, which should further bolster the Karnataka cluster's performance.

ARPOB Expansion Strategy

Management has laid out a clear path to increase ARPOB from the current ₹42,016 to ₹50,000 over the next 8 quarters. This growth will be driven by the scaling of high-ARPOB markets like Thane and Bangalore, where current ARPOBs are already in the ₹50,000-70,000 range. As these units contribute a larger share of consolidated revenue, the overall average is expected to lift significantly, alongside a shift toward more complex specialties like oncology and transplants.

Core Cluster Resilience

The core clusters in Telangana and Andhra Pradesh remain the bedrock of the company's financials. The Andhra cluster reported a strong 28% EBITDA margin in the September quarter, with management guiding for a sustainable range of 25-28%. In Telangana, while occupancy appeared low at 50%, this was attributed to the ongoing rehabilitation of 300 beds at the flagship Secunderabad unit. Once completed, and with the new 550-bed Kondapur expansion coming online in Q1 FY27, the cluster is expected to return to high single-digit growth.

Regulatory and Payer Mix Dynamics

A key headwind in the Nashik market has been the delay in obtaining the CGHS license, which is critical as 35-40% of the market business comes from CGHS and related parties. Currently, Nashik is operating on 70% cash revenue. Conversely, the company expects a 20% price hike benefit on its existing CGHS business in other clusters, which should contribute ₹10-12 crores of incremental EBITDA in FY27, helping offset some of the margin pressure from new hospital losses.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Healthcare earnings calls