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Subscribe to Krishna Institute of Medical Sciences: Ajcon Global

Ajcon Global has come out with its report on Krishna Institute of Medical Sciences. The research firm has recommended to ''Subscribe'' the ipo in its research report as on June 16, 2021.

June 24, 2021 / 08:39 PM IST
 
 
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ICICI Direct IPO report on Ajcon Global


Krishna Institute of Medical Sciences Limited (“KIMS”) was incorporated as Jagjit Singh and Sons Private Limited on July 26, 1973. KIMS is one of the largest corporate healthcare groups in AP and Telangana in terms of number of patients treated and treatments offered. The Company operates 9 multi‐ specialty hospitals under the “KIMS Hospitals” brand, with an aggregate bed capacity of 3,064, including over 2,500 operational beds as of March 31, 2021, which are 2.2 times more beds than the 2nd largest provider in AP and Telangana. KIMS offers a comprehensive range of healthcare services across over 25 specialties and super specialties, including cardiac sciences, oncology, neurosciences, gastric sciences, orthopaedics, organ transplantation, renal sciences and mother & child care. The Company's flagship hospital at Secunderabad is one of the largest private hospitals in India at a single location (excluding medical colleges), with a capacity of 1,000 beds. The Company has significantly expanded their hospital network in recent years through their acquisitions of hospitals in Ongole in Fiscal Year 2017, Vizag and Anantapur in Fiscal Year 2019 and Kurnool in Fiscal Year 2020. KIMS has taken significant efforts to create a culture that nurtures their medical talent and encouraged their doctors to become stakeholders in the KIMS hospitals where they work. This culture of empowerment and ownership has led to good talent retention and allowed patients to create long‐term relationships with their doctors. Since inception in 2000, KIMS has retained over 80% of their doctors.


Valuation and Outlook


At the upper end of the price band of ₹825, the Company's IPO is valued at P/E multiple of 32x on FY21 earnings which is decent as compared to peers like Apollo Hospitals trading at a P/E of 101x, Shalby trading at a P/E of 41x, Narayana Hrudayalaya (Net Loss in FY21) and Healthcare Global (Net Loss in FY21). KIMS is one of the few hospital chains which has reported Profit after Tax and enjoys good ROEs in the listed space. KIMS is also one of the only 3 hospitals in India that are rated AA by CRISIL. We recommend to "SUBSCRIBE for listing gains" the issue.


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