Krishna Institute of Medical Sciences: Prabhudas Lilladher Sets Price Target of Rs 800

Krishna Institute of Medical Sciences Reports 4% YoY EBITDA Growth

Krishna Institute of Medical Sciences (KIMS) has reported a 4% year-over-year (YoY) EBITDA growth, despite losses from new greenfield units. Notably, the Electronic City unit was fully commercialized in Q4, which impacted the growth. However, the turnaround time for greenfield units in new clusters has been impressive, demonstrating strong execution.

The company has been actively hiring a new leadership team across Karnataka and Kerala, providing comfort for a faster ramp-up in these clusters. KIMS has a lean cost structure and partnerships with local doctors/leadership outside Andhra Pradesh (AP) and Telangana, which are expected to help achieve faster breakeven and +25% operating profit margin (OPM) across Maharashtra, Karnataka, and Kerala clusters over the next 3-4 years.

Our research team has revised the earnings forecast for KIMS, with FY27E and FY28E EBITDA remaining broadly unchanged. However, the profit after tax (PAT) is expected to be reduced by 7-10% due to higher depreciation and interest charges.

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Outlook and Recommendations

We expect KIMS to deliver a 32% EBITDA compound annual growth rate (CAGR) over FY26-28E. Based on this outlook, we maintain a 'Buy' rating with a target price of Rs800/share, valued at 28x FY28E enterprise value to EBITDA (EV/EBITDA).

Note: The above table highlights the expected EBITDA CAGR for KIMS over FY26-28E.

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