KIMS Hospitals delivered robust top-line growth in the September quarter, though profitability remained under pressure due to the ongoing ramp-up of new facilities. Revenue rose 23.6% year-on-year to ₹9,607 crore, supported by higher patient volumes, improved ARPOB levels and expanded capacity, with the consolidated bed base crossing 6,100.
However, the addition of five new large hospitals in Maharashtra, Kerala and Karnataka—currently in the EBITDA-negative phase—continued to weigh on margins. EBITDA fell 6.5% year-on-year to ₹2,040 crore, while margins contracted by nearly 683 basis points to 21.2%. Adjusted profit after tax declined sharply by 37.7%, as higher employee and finance costs compounded the impact of lower group occupancy at new sites. Each of these hospitals is expected to incur losses of around ₹200 crore during the first year of operations, with monthly fixed costs estimated at ₹120 crore.
Despite these challenges, operational indicators remained encouraging. Occupancy improved to 53.5% from 48.8% in the previous quarter, driven by stronger inpatient and outpatient flows. ARPOB stood at ₹42,016, while newly launched hospitals in Thane and Bengaluru reported early ARPOB of ₹50,000, with the potential to reach ₹65,000–₹70,000 over time. Legacy clusters in Telangana and Andhra Pradesh continued to deliver high single-digit growth and maintained healthy margins of 25–28%.
Insurance empanelment has also progressed, with major insurers onboarding facilities in Nashik and Thane—expected to support volume growth and revenue stability.
With expansion-related costs set to pressure margins in the near term, the valuation multiple has been revised from 26x to 23x on September 2027 EV/EBITDA. This results in a target price of ₹754, offering an upside of 7% from the current market price of ₹704. The rating has been upgraded from Reduce to Accumulate.
