KIMS Q2 FY27 Earnings Call: Revenue Jumps 41% YoY, Margin Bottom Confirmed

Krishna Institute of Medical Sciences Ltd held its Q2 FY27 earnings call on November 04, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Strong Top Line, Margin Below Prior Year

• Revenue of Rs.1,363 crore — up 41.3% YoY and 14% QoQ; consolidated revenue from operations at Rs.1,344 crore (+39.9% YoY, +14% QoQ).
• EBITDA of Rs.279 crore — up 34% YoY and 16.3% QoQ; margin of 20.5% vs 20.1% in Q1 FY27 but below 21.7% in Q2 FY26.
• PAT of Rs.76 crore — vs Rs.37 crore in Q1 FY27 and Rs.72 crore in Q2 FY26; EPS for the period ended 30 September 2026 at Rs.1.8 (+8.5% YoY).
• Volume-led growth — IP volume 81,668 (+27% YoY, +12.7% QoQ); OP volume 7,31,010 (+23.3% YoY, +11% QoQ); ARPOB up 14.9% YoY / 2.3% QoQ.
• One-time Rs.8 crore PBDT provision — for doubtful debts related only to government scheme business; management said it will potentially reverse in Q3 FY 2026-2027 once the money comes in.
• Cash of Rs.420 crore — in bank balances, short-term deposits and mutual funds as on 30 September 2026.

Kondapur Ramp Ahead of Plan; AP Dragging

• Telangana revenue of Rs.700 crore — up from Rs.623 crore in Q1 FY 2026-2027, driven largely by the new Kondapur and Shikharabad units; EBITDA% dipped QoQ but absolute EBITDA increased.
• Kondapur revenue up at least 70% — within 3 months of the shift; occupancy ~70% on the 500-odd beds commissioned so far; management had expected a loss-making FY 2026-2027 but the faster ramp avoided losses, with Telangana margins expected back at 30%+ over the next 3-4 quarters (into FY 2027-2028).
• Andhra margins decelerated — adjusted for the doubtful-debt provision, AP cluster margins trend at ~22% vs 24-25% historically; declared EBITDA of Rs.55 crore, or Rs.63 crore adding back the Rs.8 crore provision (~25% margin).
• Rs.2 crore per month per center onco drag — fixed costs from two oncology programs launched end-Q1 FY 2026-2027 (Vizag, Anantapur); Vizag has already recovered to 28-29% margin as of end-October 2026, while Anantapur (inaugurated 1 Nov 2026) needs at least a year, into FY 2027-2028.
• Maharashtra occupancy crossed 60% — with just under 700 operating beds vs 950+ capacity; ~75 Thane beds and ~150-200 Nashik beds not yet operational (period unspecified).
• Q2 FY 2026-2027 confirmed as the margin bottom — trajectory expected to trend upward provided no new hospital is commissioned over the next few months; management did not quantify a specific margin target when asked by HSBC about 20%+ from Q3 FY 2026-2027.

Break-Evens Achieved; Empanelment the Gating Factor

• 27 of 28 hospitals EBITDA positive — all commissioned hospitals except Electronic City (Bangalore, less than one year old), which broke even on a monthly basis in September 2026 with quarterly EBITDA break-even guided for Q4 FY 2026-2027.
• Thane and Mahadevapura at EBITDA break-even — despite incomplete empanelment: Thane lacks 3-4 major insurers; Mahadevapura yet to onboard Jibsa, Star and others; remaining empanelments expected towards the end of FY 2026-2027, with rate negotiation the key sticking point.
• Nashik GIPSA empanelment secured — confirmation letter received last week (Q3 FY 2026-2027); GIPSA admissions begin 5 November 2026; GIPSA typically accounts for 40-50% of overall insurance volume.
• Secunderabad at 1,000-bed capacity, ~700 operational — 250 beds under renovation to be operationalized in FY 2027-2028, with potential for another 200-250 beds to reach 1,250 (period unspecified, contingent on first-phase ramp-up).
• Telangana occupancy ~50% — ~55-60% excluding 250 non-operational Secunderabad beds and 250 empty old-Kondapur beds; management indicated 60% will come (period unspecified). Sunshine units at ~60%, yet to reach 70-75%.
• 70% occupancy targeted at Thane, Bangalore and Electronic City — Dr. Abhinay Bollineni targets this 4-6 years after commissioning and said KIMS is "pretty much on track"; Bangalore is in its first year, Thane 15 months in, with healthy occupancy expected over the next 48 months.

Heavy Capex Cycle; Kakinada Consolidated

• H1 FY 2026-2027 capex of ~Rs.650 crore — of which ~Rs.275-300 crore into Kondapur; CFO Sachin Salvi indicated ~Rs.1,100 crore total outflow over the next ~18 months (into FY 2027-2028) across Secunderabad, Rajahmundry and residual Kondapur.
• Rs.3,600 million (~Rs.360 crore) of new long-term debt — raised in H1 FY 2026-2027; project debt for Secunderabad and Rajahmundry already tied up and drawn as capex is deployed.
• Net debt of Rs.2,150 crore — as of Q2 FY 2026-2027 (post QIP and warrants), net debt/EBITDA ~1.9x; 25% of QIP/warrant proceeds parked in mutual funds/bank accounts for smaller and minority acquisitions.
• Kakinada: 51% of Sarvottam Healthcare acquired for Rs.785 million (~Rs.80 crore) — in Q2 FY 2026-2027, moving from O&M to consolidated P&L 150 beds at ~38-40% occupancy, monthly revenue ~Rs.8-10 crore, EBITDA ~Rs.1.2-1.5 crore (CFO); Dr. Bhaskar Rao cited pre-acquisition EBITDA of ~Rs.15 crore and no debt; he is confident of ramping to Rs.12-15 crore per month over the next 1-2 years (FY 2027-2028 to FY 2028-2029).
• Other stake purchases — 6% of a 316-bed Sangli (Maharashtra) hospital for Rs.15 crore; Kompalli and Secunderabad (225 beds) and KIMS Ikra, Guntur (150 beds) to be acquired over time as internal resources permit (period unspecified).
• O&M portfolio at six hospitals — three O&M hospitals converted to ownership in FY 2026-2027; two added (Trishur, Arit); call options to buy O&M assets at 10-12x trailing EBITDA, agreed at contract inception; 9% of O&M top line consolidated, with the call option fair value up Rs.13.2 crore in Q2 FY 2026-2027 (booked below EBITDA).
• Minority interest at 11% of consolidated EBITDA — CFO does not expect it to exceed 15%, guiding a 10-15% range over the next several quarters (period unspecified); minority buyout decision may come towards end-FY 2026-2027.

Rent Burden and Legacy Facility Drag

• Kondapur rent of Rs.5.5 crore per month — ~Rs.60-65 crore annualized including 18% GST; a merger of the rental associate (KIMS holds 40%, may acquire the remaining 60%) is planned but not yet announced, decision expected within ~12 months (during FY 2027-2028) depending on the debt position.
• Merger economics — Dr. Bhaskar Rao noted the rent services bank EMIs on that facility, so a merger would bring Rs.400-500 crore of additional debt onto KIMS' books, while Sachin Salvi said PBT would improve by ~Rs.60 crore per year.
• Old Tondapur hospital incurring Rs.1.5 crore per month of fixed costs — including rental, expected to continue for the next 4-5 months from November 2026 (through roughly Q4 FY 2026-2027, potentially into early FY 2027-2028); decision on the facility deferred until after this window.
• 250 old-Kondapur beds currently empty — future use deferred until ramp-up of the current Kondapur hospital is observed (no timeline given).
• Rental run rate now established — Q2 FY 2026-2027 increase driven by Kondapur (one month of rent in Q1 vs three in Q2); CFO indicated no further escalation expected in forthcoming quarters.

Measured Pipeline; Regulatory Unknowns in Kerala and Oncology Pricing

• Rajahmundry and Ongole commissioning within 4-5 months — i.e., by ~Q4 FY 2026-2027/Q1 FY 2027-2028; beyond these, only ~400-500 beds of additions over the next 24 months (through ~FY 2028-2029), prioritizing stabilization.
• Next capex phase from FY 2029-2030 — beginning with the 300-bed Chennai hospital, followed by expansion in Andhra Pradesh, Telangana, Karnataka, Kerala and Tamil Nadu over the next 4-5 years (through ~FY 2031-2032).
• Kerala regulatory risk — the Kerala government is considering a bill to regulate private hospital charges; KIMS operates an O&M model in Kerala and management said it has no visibility on the proposal's details and cannot anticipate the business impact, noting many governments seek billing transparency but "a workable method is yet to emerge."
• Oncology drug pricing clarity due 9 November — final details of the government's trade margin rationalization on anti-cancer drugs are due 9 November; management stated oncology is not a big part of KIMS' revenue stream so the impact "may not be significant," with mitigation decided only after that clarity.
• Remaining bed commissioning accelerated — Kondapur beds originally planned for FY 2027-2028 now slated for Q3-Q4 FY 2026-2027; new Secunderabad oncology hospital slated for commissioning by end of FY 2027-2028.
• Qualitative outlook only — management expressed hope of doing even better in FY 2027-2028 and closed saying Q2 ended "on a high, bright note"; no numeric guidance was provided on the call.