iifl-logo-icon 1

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

sidebar image

KIMS: Doctor equity model will mitigate expansion risk

20 Jun 2023 , 10:39 AM

Recommendation: Buy

Target Price: Rs. 1,880

KIMS plans to add 500 beds in MH (Thane + Nashik) and 750 beds in KA (Bangalore) by H1FY25. Additionally, KIMS intends to add 1,500 beds in its stronghold of AP/Telangana over the next 4-5 years. While key queries from investors center on KIMS’ ability to succeed in new markets, analysts at IIFL Securities believe its strategy of equity partnership with local doctors mitigates the expansion risk in new markets. KIMS has identified a leadership team of senior doctors who have considerable experience of managing hospitals in Bangalore for the past 2 decades while KIMS also targets to onboard a financial investor in its Thane hospital. Management’s long-term target is to drive consistent 18-20% EBITDA CAGR over the next 8-10 years. KIMS is one of IIFL’s preferred picks in the mid-cap hospital space.

AP/Telangana EBITDA to clock 11-12% CAGR on bed expansions and new specialties

Despite high competitive intensity in South India, KIMS has maintained its market-leading position and has lost only 1 doctor to Yashoda’s new 2,000 bed hospital in Hitec City, Hyderabad. KIMS intends to add 1,500 beds in AP/Telangana over the next 4-5 years (Kondapur 500 beds, Secunderabad 100 beds, Dilsukhnagar 300 beds). KIMS will also add Oncology and Mother-Childcare across all its hospitals, which will enable it to drive 11-12% EBITDA CAGR in AP/Telangana over the next 7-8 year period.

Bangalore hospitals to be managed by a leadership team of senior doctors

This team will have 20% equity ownership in the 2 hospitals to be commissioned by KIMS. KIMS will commission a 450-bed hospital in East Bangalore in Q1FY25, which will be an owned-asset with an investment of Rs. 4.5-5 billion. Separately, KIMS will invest Rs. 1 billion in South Bangalore for medical equipment and will manage a 300-bed hospital at PES University on an O&M basis, where it will give 5% revenue share to the partner (PES).

Targeting to on-board a financial investor in Thane hospital

KIMS intends to operationalize a 280-bed hospital in Thane in H1FY25 at a total capex of Rs. 4.75 billion, of which 80% costs (land, building & start-up losses) could be funded by a financial investor while KIMS will be investing 20% for medical equipment. Since Thane market already operates at ARPOB of Rs. 55K per day, KIMS’ Thane hospital could potentially garner Rs. 5 billion revenue and 20-25% margins at maturity within 5-7 years of commissioning.

Related Tags

  • KIMS
sidebar mobile


Read More

Invest Right News

BSE: Firing on all cylinders
10 Apr 2024|12:07 PM
Read More
Knowledge Centerplus

Logo IIFL Customer Care Number
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

Knowledge Centerplus

Follow us on


2024, IIFL Securities Ltd. All Rights Reserved

  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.