Nephrocare Health Services

High dependence on captive clinic model

The company’s revenue is significantly concentrated in captive clinics located within partner hospital premises, exposing it to contract renewal and partner dependency risks. These clinics contributed 36.51% of revenue for H1FY26, 43.30% in FY25, 51.96% in FY24 and 62.23% in FY23. Non-renewal incidents are rising, with 4 cases in H1FY26, 1 in FY25 and 3 in FY24, highlighting increased risk of revenue loss as partner hospitals shift to operating their own in-house dialysis clinics.

Revenue dependence on PPP contracts

Public-private partnership (PPP) clinics are awarded via competitive tenders with strict compliance requirements, making revenue streams vulnerable. PPP operations accounted for 30.96% in H1FY26, 32.62% in FY25, increasing from 22.39% in FY23, with risks of non-renewals and price-driven margin pressures. 4 PPP tenders were not renewed in recent years, demonstrating vulnerability to contract-based disruptions.

Dependence on healthcare professionals

Talent retention remains a material concern, with nephrologist attrition significantly elevated at 27.68% in H1FY26, 53.05% in FY25 and 61.23% in FY24, partly due to structural challenges in markets like the Philippines. Healthcare professional fees as a proportion of total expenses have risen from 6.87% in FY23 to 13.24% in FY25, putting upward pressure on operating costs.

The company has expanded its operations in Nepal, the Philippines and the Republic of Uzbekistan in the H1FY26 and the last 3 years. Revenue from outside India surged from 11.70% in FY23 to 39.96% in H1FY26, creating heightened exposure to foreign regulatory, operational and demand risks as the company enters new markets with limited brand familiarity.