Krishna Institute of Medical Sciences Limited — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

KIMS delivered a milestone quarter in terms of top-line growth, crossing ₹1,000 crores in revenue, but profitability was heavily weighed down by the aggressive expansion phase. The company launched 7 new units in 2025, leading to expected EBITDA erosion and a sharp drop in PAT. Management remains bullish, citing strong ARPOB trends and clear breakeven timelines for new assets, while signaling that the heavy capex cycle is nearing completion.

Highlights

  • Record-breaking quarterly revenue crossing the ₹1,000 crore mark for the first time, reaching ₹1,003 crores.

  • Consolidated revenue from operations grew 29.2% YoY to ₹998 crores, driven by new unit additions.

  • EBITDA margin compressed to 20.4% from 25.9% YoY, primarily due to gestation losses from 7 new hospitals launched in 2025.

  • PAT declined significantly to ₹52 crores from ₹93 crores YoY, impacted by higher depreciation and interest costs from expansion.

  • ARPOB (Average Revenue Per Occupied Bed) saw robust growth of 20.5% YoY, reaching approximately ₹70,000-₹76,000 across key clusters.

  • Net debt stood at ₹2,850 crores as of December 31, 2025, which management believes has now peaked.

  • Operationalized 7 new hospitals in 2025 across Bangalore, Kerala, and Maharashtra, expanding the network to 25 hospitals.

Concerns

  • EBITDA Margin Erosion

Key financials

  1. Revenue from Operations ₹998 Cr +29.2%YoY
  2. EBITDA Margin 20.4%
  3. PAT ₹52 Cr -44%YoY
  4. EPS ₹1.3 -39.9%YoY
  5. ARPOB 20.5% +20.5%YoY
  6. Net Debt ₹2,850 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
    20% Revenue Growth52.5% Occupancy (Census)₹70,000 ARPOB
  • Karnataka Cluster (Bangalore)
    ₹76,000 ARPOB210 Doctor Count
  • Andhra Cluster
    Significant dip due to Aarogyasri strike narrative Volume Impact

Guidance & targets

Profitability

  • Thane & Mahadevapura EBITDA Breakeven Profitability · Q1 FY27 · High confidence EBITDA positive/neutral
    towards the end of Q1 next financial year, we should become EBITDA positive or EBITDA neutral [for Thane and Mahadevapura].

    — Abhinay Bollineni, Executive Director and CEO

  • Electronic City EBITDA Breakeven Profitability · Q3 FY27 · Medium confidence EBITDA positive/neutral
    I think by end of Q3, Electronic City also should turn EBITDA neutral or positive.

    — Abhinay Bollineni, Executive Director and CEO

Capex

  • FY27 Incremental Capex Capex · FY27 · High confidence ₹500-600 crores
    Capex for '27 and '28. '27, the full closure and capex will be another incremental INR500 crores to INR600 crores.

    — Abhinay Bollineni, Executive Director and CEO

Capacity

  • Kondapur New Facility Operationalization Capacity · next 6 months · High confidence 850 beds
    In 6 months, once the new building is ready, we will shut down the old hospital... It's an 850-beded hospital.

    — Abhinay Bollineni, Executive Director and CEO

Revenue

  • Top Line Growth Revenue · next 3 years · Medium confidence Double top line
    I said, in about a year back that in 3 years, we will be able to double our top line, which we are on the -- better than what I promised.

    — Bhaskara Bollineni, Founder and MD

Risks & concerns

  • EBITDA Margin Erosion

    high

    Margin dropped from 25.9% to 20.4% due to the 'gestation drag' of 7 new units launched in a single year.

    Management acknowledged

  • Government Receivables

    medium

    The company is owed nearly ₹600 crores from state and central governments, which is impacting cash flow and debt levels.

    Management acknowledged

  • Aarogyasri Scheme Disruptions

    medium

    A 45-60 day strike in Andhra Pradesh regarding government payments led to a significant dip in volumes for that cluster during Q3.

    Both acknowledged

  • High Debt Levels

    medium

    Net debt reached ₹2,850 crores; management insists it has peaked and will moderate as capex ends and receivables are collected.

    Analyst downplayed

Areas of evasion (1)

  • Specific occupancy numbers for individual new assets (Thane/Bangalore) were not provided, citing they are still in growth phase.

Q&A highlights

3 direct
ARPOB Normalization in Bangalore Direct
I think you should probably discount it a little because we have done a significant amount of transplant work in this quarter... we should probably think of it similar to what it is in the Telangana cluster around INR70,000, INR75,000 crores ARPOBs.

Clarifies that the current high ARPOB in Bangalore is partly due to a high-value case mix (transplants) and may moderate as volumes scale.

Asked by Ameya, JM Financial

Telangana Occupancy Discrepancy Direct
In Secunderabad we don't, we are renovating almost 200, 250 beds... actually on the beds that are available, we're running at 80%, 85% occupancy. It's just that those beds, it shows in the census beds, but they are under renovation.

Explains why reported occupancy looks low (52%) while the facility feels full, highlighting capacity constraints that will be eased by upcoming renovations and new buildings.

Asked by Rahul Jeewani, IIFL Capital

Nashik Unit Performance and Payer Mix Direct
Nashik yes... it took us 13 months to achieve break even and in January we are EBITDA positive... We've achieved almost INR8.5 crores revenue.

Confirms the first of the new batch of hospitals has turned profitable, providing a proof-of-concept for the expansion strategy in Tier-2 markets.

Asked by Rahul Jeewani, IIFL Capital

2 min read 5 chapters

Detailed narrative

Expansion Gestation Hits the Bottom Line

KIMS is currently in the most intensive phase of its expansion strategy, having launched 7 new hospitals in 2025 alone. While this drove a 29.2% YoY increase in revenue from operations to ₹998 crores, it caused a significant 550 bps contraction in EBITDA margins to 20.4%. The resulting PAT of ₹52 crores was a sharp decline from ₹93 crores in the previous year, reflecting the high initial costs, depreciation, and interest associated with these new assets.

New Unit Breakeven Trajectory

Management provided a clear roadmap for the stabilization of new units. The Nashik facility turned EBITDA positive in January 2026, its 13th month of operation, with ₹8.5 crores in monthly revenue. Thane and Mahadevapura (Bangalore) are expected to reach EBITDA breakeven by the end of Q1 FY27, while the recently commissioned Electronic City unit is targeted for breakeven by Q3 FY27. This sequential stabilization is critical for margin recovery.

Telangana and Andhra Cluster Dynamics

The mature Telangana cluster continues to grow at 20% YoY, though reported occupancy of 52.5% is misleading due to 200-250 beds being under renovation in Secunderabad; available bed occupancy is actually 80-85%. In Andhra Pradesh, volumes were temporarily hit by a 45-60 day strike related to the Aarogyasri government scheme, though management noted that revenues bounced back to Q2 levels by January.

Debt Peak and Receivables Challenge

Net debt has climbed to ₹2,850 crores, but management signaled this is the peak as the 3-year capex cycle concludes. A significant portion of the debt is linked to ₹600 crores in pending receivables from state and central governments. Bhaskara Bollineni emphasized that as these payments arrive and new units stabilize, debt will start 'coming down quarter-on-quarter' without the need for incremental borrowing.

Strategic Entry into Chennai

KIMS has finalized an agreement to operate a hospital in Chennai for 26 years, with construction expected to finish in 2 years. This move is described as the 'missing link' in consolidating their presence across South India. Management believes the KIMS brand already has strong goodwill in Tamil Nadu due to the large Telugu-speaking population and existing patient flows from Andhra Pradesh.

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