Prabhudas Lilladher's research report on Krishna Institute of Medical Sciences
Krishna Institute of Medical Sciences (KIMS) reported healthy EBITDA growth of 14% in Q1 after 2 quarters of subdued performance. Our FY25E/FY26E EBITDA estimates stands marginally increased by 2-3%. Though FY24 saw muted EBITDA growth, new clinical talent hiring and addition of subspecialties across Telangana units will lead to ramp-up in revenues and profitability from FY25. Given its lean cost structure and partnership with local doctors/ leadership outside Andhra Pradesh (AP) & Telangana region, the management remains confident of achieving faster breakeven and +25% OPM across these new clusters over the next 4-5 years.
Outlook
We expect 18% EBITDA CAGR over FY24-26E with healthy return ratios of ~20%. Maintain ‘Buy’ rating with TP of Rs2,400/share based on 25x FY26E EV/EBITDA. Delay in breakeven of new units will be a key risk to our call.
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