Nephrocare Health Services Limited — Q3 FY26 earnings call

Call held 18 Feb 2026

Management summary

NephroPlus reported robust financial performance for Q3 and 9M FY26, driven by strong revenue and profitability growth across its operations. The company saw significant expansion in adjusted EBITDA and PAT, alongside an improved ROCE. International markets, particularly the Philippines and Uzbekistan, played a crucial role in enhancing revenue per treatment and overall margins, with international contribution rising to 41% of total revenue.

Highlights

  • Revenue for Q3 FY26 grew 32% YoY to Rs. 260 crores.

  • Revenue for 9M FY26 increased 37% YoY to Rs. 733 crores.

  • Adjusted EBITDA for Q3 FY26 rose 43.1% YoY to Rs. 63 crores, with margin expanding to 24.3% from 22.4%.

  • Adjusted EBITDA for 9M FY26 grew 52% YoY to Rs. 175 crores, with margin improving to 23.9% from 21.5%.

  • Adjusted PAT for Q3 FY26 increased 71% YoY to Rs. 34 crores, achieving a 13% margin.

  • Adjusted PAT for 9M FY26 surged 103.3% YoY to Rs. 86 crores, with a 12% margin.

  • Annualized ROCE is expected to reach 24.7% in FY26, up from 18.7% in FY25.

  • International revenues contributed approximately 41% of total revenue in 9M FY26, significantly up from 12% in FY23.

Key financials

2 periods

Headline

  • Revenue
    ₹260 Cr
    YoY +32%
  • Adjusted EBITDA
    ₹63 Cr
    YoY +43.1%
  • Adjusted EBITDA Margin
    24.3%
  • Adjusted PAT
    ₹34 Cr
    YoY +71%
  • Adjusted PAT Margin
    13%
  • Treatment Volumes
    0.98 Mn
    YoY +17.7%
  • RPT
    ₹2,642
    YoY +12%
  • Annualized ROCE
    24.7%
  • Net Debt
    ₹-283.6 Cr
  • Cash Flow to EBITDA Conversion
    65%

9M

  • Revenue
    ₹733 Cr
    YoY +37%
  • Adjusted EBITDA
    ₹175 Cr
    YoY +52%
  • Adjusted EBITDA Margin
    23.9%
  • Adjusted PAT
    ₹86 Cr
    YoY +103.3%
  • Adjusted PAT Margin
    12%
  • Patient Volumes
    36,550 patients
    YoY +15%
  • Treatment Volumes
    2.85 Mn
    YoY +17%
  • RPT
    ₹2,574
    YoY +17%

What they filed

Q1 FY27: revenue up 23.7%, net profit up 33.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue197 219 228 246 260 +32%266 +21%282 +24%
EBITDA44 51 48 64 61 +39%51 +0%60 +25%
Net profit20 25 24 -9 32 +60%30 +20%32 +33%
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

  • International Business
    41% Revenue Contribution12% Revenue Contribution FY23

Guidance & targets

Revenue

  • Revenue CAGR Revenue · next 3-4 years · Medium confidence 15%-20%
    Speaking of our guidance going forward, we will want to maintain a revenue CAGR guidance of 15%-20% over a period of 3-4 years.

    — Vikram Vuppala, Chairman and Managing Director

Profitability

  • ROCE Profitability · ongoing · High confidence ROCE accretive
    I think as Vikram and Rohit mentioned, we are very focused on one metric, which is ROCE, because ROCE accounts for all the capital that gets allocated and along with that working capital and AR cycle. So when we look at the projects, we very closely look at the ROCE profile and at a portfolio level, at a platform level, we try to get into projects which are ROCE accretive in nature.

    — Prashant Goenka, Group Chief Financial Officer

Capex

  • Annual Capex Capex · historically · Medium confidence Rs. 100-125 crores
    In terms of the capital expenditure, we typically invest anywhere between Rs. 100-Rs. 125 crores historically and like Vikram and Rohit mentioned, it is difficult to predict the future, but that is the historical number.

    — Prashant Goenka, Group Chief Financial Officer

Market Share

  • International Business Contribution Market Share · future · Medium confidence inching up slowly
    So we expect this to be inching up slowly, again, depending on the geography and the quantum that we do.

    — Rohit Singh, Group Chief Executive Officer

  • India Business Contribution Market Share · foreseeable future · Medium confidence majority
    I think India would continue to be the majority for the foreseeable future.

    — Vikram Vuppala, Chairman and Managing Director

Capacity

  • New Market Entry Frequency Capacity · every 1-2 years · Medium confidence 1-2 geographies
    Every 1-2 years, we would enter 1-2 geographies.

    — Vikram Vuppala, Chairman and Managing Director

Risks & concerns

  • Unpredictability of large growth drivers

    medium

    The third growth driver (large acquisitions, sizable PPPs, new market entries) is a big needle mover but quite unpredictable in terms of timelines.

    Management acknowledged

  • Variability in quarterly performance

    low

    The primary source of variability in revenue forecasts stems from the timing of new capacity additions, leading to potential spillovers in execution from one quarter to the next.

    Management acknowledged

  • Lumpy price increases in dialysis business

    low

    Dialysis business experiences lumpy price increases, making it difficult to predict RPT changes in coming years.

    Management acknowledged

Areas of evasion (3)

  • Specific patient targets for new international markets (e.g., Saudi Arabia)
  • Detailed breakdown of unit economics and revenue contribution across different business models (captive, PPP, standalone)
  • Segment-specific RPT growth for India vs. international

Q&A highlights

0 direct, 2 evasive
Saudi business ramp-up and patient targets Evasive
So Madhav, as I said that we are at a stage of first establishing and starting our operations there. So once we have executed, demonstrated our service there, then only we would have a visibility of any other aspect there.

Analyst sought specific targets for the Saudi market, but management deferred providing any concrete numbers or timelines, indicating early stages of operation and lack of clear short-term projections.

Asked by Madhav Marda

Direction of future margins Partial
Essentially, the margins will be in that kind of level, right. If you open a new geography, then the first year of that new geography may pull down the margin by a percent or 150 basis points. But as the volume increases in existing geographies, the operating leverage kicks in. So reasonably healthy in that range is what I would say.

Management indicated that margins would remain 'in that kind of level,' suggesting no significant expansion despite international growth, due to potential initial investments in new geographies.

Asked by Madhav Marda

Revenue mix and unit economics across models (captive, PPP, standalone) Evasive
I think the right way to look at our business is at the consolidated level. As Vikram and Rohit mentioned, it is a platform play. It is the fact that we have been operating in India for the last 16 years at a $22 price point in India that has given us a platform that when we take it to the international market, we are able to generate higher margins than the local competition and also create a ROCE accretive return for the company as a whole.

Management avoided providing a detailed breakdown of revenue contribution and unit economics for different business models, directing the analyst to view the business at a consolidated platform level, which limits granular understanding.

Asked by Vivek

3 min read 6 chapters

Detailed narrative

Strong Financial Performance in Q3 and 9M FY26

NephroPlus delivered robust financial results for Q3 and 9M FY26. Q3 FY26 revenue increased 32% year-on-year to Rs. 260 crores, while 9M FY26 revenue grew 37% to Rs. 733 crores. Adjusted EBITDA for Q3 FY26 was Rs. 63 crores, up 43.1% YoY, with margins expanding to 24.3%. For the nine-month period, adjusted EBITDA reached Rs. 175 crores, a 52% YoY growth, with margins improving to 23.9%. Adjusted PAT also saw significant growth, rising 71% in Q3 to Rs. 34 crores and 103.3% in 9M to Rs. 86 crores.

Operational Growth Driven by Patient and Treatment Volumes

Operational metrics demonstrated consistent growth, with patient volumes for 9M FY26 reaching over 36,550, a 15% increase year-on-year. Treatment volumes in Q3 FY26 stood at 0.98 million, up 17.7% from the previous year, and 9M FY26 treatments totaled 2.85 million, growing 17% YoY. Revenue per treatment (RPT) also improved, with Q3 FY26 RPT at Rs. 2,642 (up 12% YoY) and 9M FY26 RPT at Rs. 2,574 (up 17% YoY), primarily driven by increasing penetration into higher-priced international markets.

Strategic Expansion and International Contribution

The company's strategy of international expansion has significantly impacted its revenue mix, with international revenues contributing approximately 41% of total revenue in 9M FY26, a substantial increase from 12% in FY23. NephroPlus has established a strong presence in the Philippines, becoming the third-largest network, and secured a PPP project in Uzbekistan. New market entries are evaluated based on demand, reimbursement, political stability, and ROCE accretiveness, with a target of entering 1-2 new geographies every 1-2 years.

Focus on ROCE and Capital Allocation

NephroPlus maintains a strong focus on Return on Capital Employed (ROCE) as a primary filter for capital allocation decisions. The annualized ROCE is projected to be 24.7% in FY26, a significant improvement from 18.7% in FY25. The company's net debt remained negative at Rs. 283.6 crores as of 9M FY26, indicating a healthy surplus cash position. Historically, capital expenditure has typically ranged between Rs. 100-125 crores, with a consistent focus on cash conversion, reflected in a 65% operating cash flow to EBITDA conversion for 9M FY26.

India Platform and Cost Efficiency

The company's 16 years of operating in India at a low price point (around $20 RPT) has enabled it to build an efficient platform. This includes direct negotiation with global suppliers for consumables, optimal human resource staffing through training academies (10 in India), an in-house biomedical team for preventive maintenance and machine life extension, and technology for network management. These efficiencies contribute to higher margins in international markets compared to local competition.

Business Model and Growth Drivers

NephroPlus operates through captive (shop-in-shop with hospitals), PPP, and standalone clinic models. The captive model is the largest component in India, followed by PPPs, which are pursued opportunistically. Standalone clinics are a small but growing component. Growth is expected from ramping up existing clinics, roll-ups of clinics in existing countries (Brownfield acquisitions), and strategic entry into new countries or large PPP projects. The company aims for a revenue CAGR of 15%-20% over the next 3-4 years, while acknowledging the unpredictable nature of large-scale growth initiatives.

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