Krishna Institu. Q4 FY25 Earnings Analysis

- Continued strong growth in revenue is expected, driven by bed expansions and adding new specialties across clusters. - Telangana cluster, including Sunshine and Kondapur facilities, has significant ramp-up potential with additional beds and higher occupancy. - AP cluster margins expected to improve from 26% to around 30% over 2-3 years with oncology and mother & child care additions. - Nashik hospital expected to break even by 2Q/3Q FY26, with doctor onboarding completing by March 2025. - Karnataka and Kerala clusters are growth focuses, planning to scale up to 2,000 beds in Bangalore and 2,500-3,000 beds in Kerala over time. - International patient revenue in Telangana targeted to increase from INR 40-50 crores to INR 100-150 crores over time; Bangalore and Thane expected to contribute more. - ARPOB growth and inpatient/outpatient volume expansion expected to continue in Telangana and AP regions. - Overall, management expects to maintain EBITDA/debt below 2x and equity/debt below 1 while seizing market opportunities.

- EBITDA margins in AP cluster expected to improve from 26% in Q2 FY25 to about 30% in 2-3 years post oncology and mother & child care additions by FY26-FY27. - Telangana and Andhra Pradesh clusters are expected to sustain ARPOB (Average Revenue per Occupied Bed) growth with ongoing volume and case mix improvements. - Nashik hospital projected to break even by Q2/Q3 FY26, with doctor onboarding to complete by March 2025, supporting revenue and occupancy ramp-up. - Maharashtra cluster margins expected to improve as Nashik loss narrows and Nagpur grows beyond seasonal impact. - Debt-to-EBITDA maintained below 2x and equity-to-debt below 1, with plans to reduce financial leverage as new hospitals mature. - Operating costs linked to new hospitals expected to cause some drag in FY26 but will stabilize as assets mature. - Management indicates confidence in maintaining steady profitability growth aligned with bed expansions and specialty additions.

- The company’s CAPEX guidance for FY 2026 remains around INR 500-600 crores, in line with previous estimates. - Ongoing capital expenditures are on track with sanctioned facilities, mainly for bed expansions and new hospitals. - Major projects include adding 500 beds at Kondapur (Telangana cluster) expected next financial year. - New hospitals are planned in Karnataka (including Sarjapur and northern Bangalore) and Kerala, aiming to scale to around 2,000 beds in Bangalore and 2,500-3,000 beds in Kerala over time. - Construction on new hospitals in Karnataka will start early next year with a 3-4 year commissioning timeline. - Kompally hospital (250 beds) in Telangana to be commissioned by year-end, operating under an O&M model requiring minimal operational cost on company books. - Expansion strategy focuses on bed additions in existing clusters (AP, Telangana) and new cluster growth while maintaining a debt-to-EBITDA ratio under 2 and debt-to-equity below 1.

- The company has planned its expansions such that EBITDA to debt stays under 2x and equity to debt remains below 1 (around 0.8–0.9), indicating controlled leverage. - As of December 31, 2024, outstanding debt is approximately INR 1,550 crores with a projected increase to around INR 1,750 crores to fund ongoing projects. - Debt levels are expected to maintain a debt-equity ratio below 1 and debt-to-EBITDA below 2, with ratios likely to improve as new hospitals mature. - CAPEX guidance for FY '26 remains around INR 500–600 crores, and most facility sanctions have been secured; expenses are in line with budgets. - No explicit mention of new equity fundraise; focus appears on debt-financed expansion with management reassurance on maintaining healthy leverage and cautious borrowing.

The transcript does not explicitly mention the current or expected orderbook or pending orders for Krishna Institute of Medical Sciences Limited. However, related points on expansion and development plans include: - Multiple new hospitals and bed expansions planned, including 3 projects in Thane and Bangalore expected to be fully operational by Q2 FY '26. - Ongoing expansions in Telangana, Andhra, Maharashtra, Karnataka (Bangalore), and Kerala with specific plans for adding 500 beds in Kondapur and scaling up to 2,000 beds in Bangalore. - In Kerala, plans to scale up to 2,500-3,000 beds with ongoing acquisitions in Kollam, Thrissur, Kannur, and potential future acquisitions in larger cities like Kochi and Calicut. - CAPEX guidance remains around INR 500-600 crores aligned with these expansion projects. - Most expansion projects have received sanction and are progressing as per budget and schedule. No direct data on orderbook or pending orders is provided.