Krishna Institu. Q2 FY26 Earnings Analysis

- Mature clusters like Telangana and Andhra Pradesh are expected to grow IP volumes at a moderate 5%-6% annually, with Telangana seeing acceleration from new hospital openings like Kondapur and Gachibowli expansions. - New facilities in Bangalore, Thane, and Nashik are in ramp-up stages; Bangalore's hospitals aim to reach EBITDA breakeven by ~30%-40% occupancy within 12 months of commissioning. - Maharashtra and other micro-markets (Karnataka, Kerala) show strong long-term growth potential with good traction from doctors and unmet demand in Tier 2/3 cities. - Oncology and other specialty offerings are being expanded to improve case mix and ARPOB, especially in newer and Andhra clusters. - ARPOB growth of around 4%-5% annually is expected overall, with higher ARPOB in new markets raising blended ARPOB to approximately INR 50,000–55,000 in the coming years. - Capacity utilization and bed additions will drive volume increase, although new capacity commissioning will take 4-5 years to reach 70% occupancy levels.

- Expected ARPOB growth of 4-5% annually over next 2-3 years. - Cluster-wise steady-state EBITDA margins targeted at 20%-25%. - New hospitals (e.g., Bangalore units) expected to become EBITDA neutral within 12 months of commissioning. - Losses from new units (Nashik, Thane) expected to neutralize by end of FY '26 or Q3, FY '27. - Incremental bed capacities in various locations expected to ramp up over 4-5 years to about 70%-75% occupancy. - Telangana cluster occupancy expected to rise from current ~50% to 65%-70%, potentially increasing margins. - The company aims for overall earnings growth driven by expansion in Maharashtra, Karnataka, Kerala, and mature clusters like Telangana and Andhra. - No specific consolidated EPS guidance provided, but current EPS showed 9.2% YoY degrowth, implying growth focus on operational ramp-up and margin improvement.

- The company is currently commissioning new hospital beds in multiple locations including Thane, Bangalore, Nashik, and Maharashtra cluster, with phased bed additions planned (e.g., starting with 50-100 beds, gradually increasing to full capacity over 3-4 years). - Significant greenfield and brownfield expansions are ongoing, particularly in Telangana, Andhra Pradesh, Karnataka, Kerala, and Maharashtra. - New facilities in Bangalore (800 beds) and Thane (300 beds) are being brought online, with anticipated EBITDA breakeven within 12 months of operation. - Expansion includes adding specialties such as oncology, pulmonology, cancer care, and mother and child care in Sunshine hospital and other locations. - Focus is on stabilizing current expansions before initiating new greenfield projects—future expansions will continue around core clusters after FY'27 stabilization. - Investment in digital health platforms, AI, and technology for improved patient care is ongoing to enhance scalability and quality. - The company targets a steady-state ROCE of 20%-25% on ramped-up clusters.

- The transcript does not explicitly mention any current or planned new fundraising through debt or equity. - Focus is on stabilizing and ramping up operations for newly commissioned hospitals before considering further expansions. - Post stabilization of ongoing greenfield hospitals, the company plans to explore new greenfield projects primarily in Karnataka, Kerala, Maharashtra, Telangana, and Andhra Pradesh. - No specific fundraise timeline or instruments (debt/equity) are disclosed in the available discussion.

- The company is currently stabilizing greenfield hospitals commissioned in the current year and plans to start closing on new greenfield hospitals towards the end of the year. - New greenfield hospital projects typically take 3-4 years to stabilize operations. - Expansion focus remains on Karnataka, Kerala, Maharashtra, Telangana, and Andhra Pradesh. - No explicit numeric order book or pending orders mentioned, but the company is actively exploring opportunities within existing clusters. - Existing announced projects are expected to conclude commissioning by end of FY 2027. - Post stabilization of current projects, new greenfield projects will be initiated, implying a steady inflow of future orders. - Incremental bed additions are ongoing across several locations, such as Ongole, Anantapur, Kondapur, and Rajamundry, with phased commissioning continuing.