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Key Financial Highlights • Gross Revenue: INR 693 crores (13.8% YoY increase) • EBITDA: INR 184 crores (14.9% YoY increase)
Strategic Developments • Acquisitions: • Queen's NRI Hospital in Vizag • New hospital in Nashik • Achievements: Record number of lung transplants • Tax Reduction Impact: Potential positive effect on medical insurance premiums
Analyst Inquiries and Responses • ARPOB Growth: • Increased despite lower occupancy due to reduced Average Length of Stay (ALOS) and improved payer mix. • Occupancy Reporting: Healthy occupancy rate is 65-70%. • ALOS Sustainability: Confidence in maintaining reduced ALOS and expanding EBITDA margins.
Upcoming Projects • New Hospitals: • Thane, Nashik, and Bengaluru on track for Q4 launch. • Cancer care units planned in Andhra Pradesh. • Funding for Capital Expenditures: Reliance on internal accruals with a debt-to-equity ratio target of 0.75 to 1.
Vizag Acquisition Insights • Current Performance: Revenue decreased from INR 120-150 crores to INR 65-70 crores due to competition. • Future Potential: Expected to scale up to INR 250 crores in 3-4 years.
Operational Updates • Sunshine Facility: Stabilized with expected growth. • Nagpur Facility: Margin expansion anticipated; plans to introduce cancer services. • Karnataka Expansion: New corporate hires to strengthen operations.
Financial Projections • ALOS Stabilization: Expected between 3.6 to 3.8 days. • Debt Increase: Anticipated rise to INR 1,600-1,700 crores by year-end.
Market Positioning • Affordability Commitment: Consistent pricing strategy across regions. • Insurance Growth: Primarily in metro areas; potential GST changes may boost uptake.
Future Growth Expectations • Sustainability of Growth: Continued growth from existing hospitals and new acquisitions, with some initial losses expected from new facilities. • ARPOB Target: Sustainable range projected between INR 36,000 to INR 38,000.
Closing Remarks • Healthcare Sector Transformation: Emphasis on growth, insurance penetration, and successful regional expansions. • Future Strategies: Potential for leveraging debt or pursuing an IPO for expansion.
Company Overview • Host: IIFL Securities • Key Personnel: • Dr. Bhaskara Rao Bollineni (Founder & MD) • Dr. Abhinay Bollineni (Executive Director & CEO) • Mr. Sachin Salvi (CFO) • Transcript Availability: On company website and stock exchanges.
Financial Performance • Q4 Results: • Gross Revenue: INR 6,376 million (9.8% YoY increase) • EBITDA: INR 1,628 million (3.2% YoY decline, 8.3% QoQ increase) • EBITDA Margin: 25.5% (decreased from previous year) • Patient Volume Growth: Outpatient consultations up by 7.9% YoY.
Expansion Plans • New Projects: • 290-bed multi-specialty hospital in Thane, Mumbai. • Ongoing expansions in Telangana and Maharashtra. • Future Facilities: • 800-bed flagship hospital in Kondapur, Hyderabad. • 450-bed hospital in Marathahalli and 300-bed facility in South Bangalore.
Financial Strategy • Debt Profile: INR 500 crores total debt, with INR 250 crores for Thane project. • EBITDA Projections: Expected loss of no more than INR 10 crores per new facility in the first year. • Margin Goals: Targeting 25% EBITDA margin in Nagpur, replicable in Nashik and Thane.
Operational Insights • Depreciation Costs: Increased from INR 35 crores to INR 46 crores due to Begumpet hospital operations. • Occupancy Rates: 10% revenue growth in AP-Telangana region; confidence in maintaining growth despite hiring delays. • ARPOB Growth: Attributed to decreased average length of stay and high occupancy rates.
Competitive Landscape • Kondapur Region: Strong revenue growth despite new hospital openings; optimism about attracting clinical talent. • Market Dynamics: No significant bed additions in the area over the past decade, except for KIMS Sunshine.
Future Outlook • Revenue Growth Expectations: Long-term sustainable growth projected at 10%, with potential for higher growth due to new specialties. • Insurance Pricing: Anticipated 10-12% increase from contract renewals, with potential for 20-30% jump from GIPSA revisions. • Operational Breakeven: Expected for new facilities by the end of their first year.
Conclusion • Management Confidence: Emphasis on strategic growth, financial discipline, and commitment to health management.
Submission Details • Date of submission: February 8, 2024 • Earnings call date: February 5, 2024 • Submitted to: Bombay Stock Exchange and National Stock Exchange of India • Moderated by: Rahul Jeewani (IIFL Securities) • Key personnel: • Dr. Bhaskara Rao Bollineni (Founder and Managing Director) • Dr. Abhinay Bollineni (Executive Director and CEO) • Sachin Salvi (CFO) • Transcript available on the company's website.
Financial Performance Overview • Nine months ending December 2023: • Consolidated revenue: INR 1,874 crores (14% YoY increase) • EBITDA: INR 491 crores (6.3% YoY increase) • Q3 FY24: • Gross revenue: INR 609 crores (7.1% YoY growth, 7.1% QoQ decline) • EBITDA: INR 150 crores (4.6% YoY decline, 16.5% QoQ decline) • EBITDA margin: 24.7% • Inpatient and outpatient volumes grew YoY but declined QoQ.
Community and Academic Initiatives • Successful presentations at international conferences. • Health awareness programs on deafness and arthritis. • Expansion plans include a new unit in Nasik expected to open in 2025. • Notable medical achievements highlighted.
Medical Success Stories • Significant cases included: • Liver transplant sponsorship for a child. • Revival of a cardiac arrest patient. • Innovative cancer treatments and surgeries for children. • Media attention on the hospitals' capabilities.
Q&A Session Highlights • Concerns on EBITDA margins: • Decline in Telangana unit margins explained by one-time expenses and increased doctor costs. • ARPOB inquiries: • Expected similar ARPOB for KIMS Cuddles. • Anticipated 20%-25% EBITDA margin for Nagpur unit. • Occupancy rates: • Telangana: 61%, Andhra Pradesh: ~70%. • Plans to increase bed capacity to alleviate pressure. • Mumbai project update: • Timeline for operationalization by Q4 2025. • Debt levels: • Current debt: INR 705 crores, aiming for a debt-to-EBITDA ratio of 1 to 1.5 times.
Operational Updates • Sunshine facility experiencing temporary revenue decline. • Nashik hospital pre-operational activities confirmed. • Plans for 415 beds in Bangalore by FY25. • Positive outlook for Vizag gastro unit recovery.
Future Strategies • Focus on enhancing hospital infrastructure and technology. • Plans for new facilities in Nasik and Thane. • Commitment to understanding local healthcare needs for future growth.
Conclusion • Management expressed gratitude to stakeholders and emphasized the importance of preparation for expansion. • Commitment to provide further updates in the coming months.
KIMS Hospitals Q2 FY2024 Earnings Conference Call Summary
Key Financial Results • Gross Revenue: Rs. 655 Crores (14.3% YoY growth) • Operating EBITDA: Rs. 180 Crores (11.5% increase) • Volume Growth: Increase in inpatient and outpatient volumes
Significant Developments • Facility Integration: New facilities and expansion plans • Order for Equipment: $38 million for advanced radiation therapy systems • Community Initiatives: Workshops on surgical skills, pain management, and waste management
Medical Achievements • Organ Donation: 16 donations leading to 36 transplants • Notable Cases: • Organ transplant from a 14-month-old to a 58-year-old • Treatment of Persistent Mullerian Duct Syndrome • Vertebral body stenting procedure at KIMS Kondapur
Expansion Plans • New Facilities: Relocation of Sunshine facility and growth in Kondapur • Operational Beds: Initial plans for 30-35% occupancy in new facilities • Investment: Rs. 500 Crores for a new 600-bed facility in Kondapur
Financial Discussions • Project Delays: 6-9 month delays in Thane due to legal issues • Thane Facility Update: Legal issues resolved; construction progressing • EBITDA Impact: Less than 1.5% drag on overall revenue for FY2025
Strategic Focus • Expansion Strategy: Focus on fewer states and large-format hospitals • Payer Mix: Slight increase in corporate partnerships; stable cash and insurance proportions
Future Plans • Bed Expansion: 1,200-1,300 beds planned in Andhra Pradesh and Telangana • Bengaluru Expansion: Targeting 700 beds with initial operationalization of 30 beds
Insurance and Customer Service • Claims Processing: Collaborating with third-party applications to improve efficiency
Shareholder Information • Pledged Shares: Currently at 16.2%; plans to reduce to under 10% by FY2024
Closing Remarks • Commitment to Growth: Emphasis on financial discipline and future plans.
Submission Details • KIMS submitted a transcript of their earnings call to the Bombay Stock Exchange and National Stock Exchange. • Key management present: • Dr. Bhaskar Rao Bollineni (Founder and Managing Director) • Dr. Abhinay Bollineni (Executive Director and CEO) • Mr. Vikas Maheshwari (CFO)
Financial Performance Highlights • FY2023 Results: • 54.7% increase in consolidated revenue (Rs. 5759.2 million) • 18.4% growth in consolidated profit after tax (Rs. 986 million) • EBITDA margin improved to 27.1% • Expansion Projects: • New hospitals planned in Secunderabad, Nashik, and Bangalore. • Successful SAP implementation across units.
Q&A Session Insights • Nagpur Facility: • Current EBITDA margins at 4-5%, expected to stabilize at 10-11% in 6-8 months. • Thane Facility: • 300-bed multi-specialty hospital with estimated capital expenditure of Rs. 400-450 Crores. • Payor Mix: • Optimal mix of 80% cash and insurance; debtor days around 40. • Interest Costs: • Current interest run rate at Rs. 24 Crores annually; net debt position of Rs. 300 Crores.
Strategic Acquisitions and Growth Plans • Minority Stake Acquisitions: • Recent investments in Sunshine and Kondapur hospitals (~₹95-96 crores). • Oncology Services Expansion: • Plans to add oncology services to six hospitals in the next 24 months. • Capacity Expansion: • Telangana capacity to rise from 1,200 to nearly 2,000 beds; Andhra Pradesh from 645 to about 1,200 beds.
Operational Readiness and Future Outlook • Thane Hospital: • On track for completion by June 2024; total Capex of Rs. 250 Crores. • Capital Expenditures: • Planned Rs. 250 Crores for new hospitals in Nashik and Bangalore, operational by Q1 FY2025. • Management and Leadership: • Focus on stabilizing operations in newly acquired assets; local teams to sustain operations post-integration.
Conclusion • KIMS emphasizes commitment to quality, operational improvements, and strategic expansions for future growth. • Ongoing communication with stakeholders regarding developments and performance.
Submission Details • Date: February 15, 2023 • Company: Krishna Institute of Medical Sciences Limited (KIMS) • Event: Q3 FY2023 earnings conference call held on February 10, 2023 • Key Personnel: • Dr. Bhaskar Rao Bollineni (Founder and Managing Director) • Dr. Abhinay Bollineni (Executive Director and CEO) • Mr. Vikas Maheshwari (CFO) • Hosted by: IIFL Securities Limited • Transcript Availability: Company website and stock exchanges
Financial Highlights • Revenue Growth: 42.8% year-on-year, reaching Rs. 5,621 million • Adjusted EBITDA: Increased by 14% to Rs. 1,417 million (26.2% margin) • New Acquisitions: Included performance from Nagpur Hospital and additional stakes in subsidiaries • Operational Growth: Significant increases in inpatient and outpatient volumes, average revenue per bed, and patient
Expansion Plans • New facilities expected to open by FY2024 and FY2025 • Focus on volume-driven revenue growth and academic contributions
Q&A Session Insights • Sunshine Facilities: • Expected occupancy growth from 30-40% to 60-70% in Gachibowli • Transition to Begumpet facility by mid-April 2023 • Kingsway Hospital: Anticipated monthly revenues of Rs. 20-22 Crores within 18-20 months • Capital Expenditure: Rs. 300 Crores raised for capex and acquisitions • New Hospitals: • Bengaluru and Nashik hospitals on track for early openings • Chennai project on hold, exploring acquisition opportunities • EBITDA Margins: Expected low 20s margins for new hospitals after 24-36 months
Operational Challenges • Organ Transplant Business: Revenue decline to 2%, but volume remains stable • Secunderabad Unit Relocation: Potential short-term disruptions expected, with long-term margin improvements anticipated • Sunshine Inpatient Volumes: Decline attributed to facility closure and staffing adjustments
Growth Strategies • Focus on introducing new clinical specialties in Andhra Pradesh and Telangana • Plans for new 500-bed hospital in Kondapur and additional beds in Secunderabad • Gradual growth expected in AP and Telangana, with significant contributions from new facilities
Conclusion • KIMS aims for a revenue run rate of around Rs. 1,000 Crores in the next three to four years, emphasizing strategic expansion and operational improvements.