🧐 At a Glance
Krishna Institute of Medical Sciences (KIMS) is no Apollo — but quietly dominates Tier-2 and Tier-3 cities in Andhra Pradesh and Telangana. Its stock is up 54% in 1 year, revenue has crossed ₹3,000 Cr, and ROE is steady at 19%. But trading at a P/E of 67 with zero dividend — is this hospital stock in ICU or about to go IPO-style multibagger again?
🏥 1. Business Model: Apollo ka Cousin, Tier-2 ka Boss
KIMS isn’t trying to be a flashy luxury hospital chain. It’s a cost-efficient multi-specialty hospital operator focusing on:
- 🏙️ Tertiary & quaternary care in Hyderabad (Tier-1)
- 🏘️ Affordable full-stack hospitals in Tier-2/Tier-3 towns like Nellore, Ongole, Anantapur
- 👨⚕️ Offers services across 40+ specialties (cardio, ortho, neuro, transplant)
Their USP? Low cost of operations + high asset turnover in underserved regions.
🧠 In short: They don’t do gold-plated liver transplants in South Delhi — they save lives in Rajahmundry.
📈 2. Financial Pulse: Strong, but Stable
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 1,330 | 1,651 | 2,198 | 2,498 | 3,035 |
| Net Profit (₹ Cr) | 205 | 344 | 366 | 336 | 415 |
| OPM (%) | 28% | 32% | 28% | 26% | 26% |
| ROCE (%) | 29% | 34% | 24% | 17% | 15% |
| ROE (%) | 22% | 28% | 20% | 17% | 19% |
🩺 3-Year Sales CAGR: 23%
🩺 3-Year PAT CAGR: Just 4%
🩺 TTM EPS: ₹9.61
🩺 Stock P/E: 67
🎯 One of the most expensive hospital stocks per rupee of profit. More on that below.
🧾 3. Q4 FY25 Update: No Emergency, But No Euphoria
| Metric | Q4 FY25 | QoQ % |
|---|---|---|
| Revenue | ₹797 Cr | +3% |
| EBITDA | ₹198 Cr | +6% |
| PAT | ₹106 Cr | +15% |
| EBITDA Margin | 25% | Flat |
| EPS | ₹2.54 | +14% |
✅ Margins steady
✅ PAT growing
⚠️ Growth moderate — no hockey stick
🏗️ 4. Growth Story: Capex + Acquisitions
KIMS is not just sitting pretty.
- 🏥 Total beds: 3,951 (plan: 5,000+ by FY27)
- 📍Geographical expansion into Maharashtra (Nashik) + Bengaluru
- 💸 CWIP (capital work in progress) now ₹1,214 Cr → huge capex funnel
- 💳 Acquired stake in Sunshine Hospitals & Nagpur Radiant
⚠️ That also means:
- Borrowings up from ₹678 Cr → ₹2,557 Cr in 2 years
- Interest costs tripled
🔎 5. Valuation: Diagnosis = Expensive
At ₹633/share and ₹25,300 Cr market cap:
- TTM EPS = ₹9.61 → P/E = 67
- Book Value = ₹53 → P/B = 11.8x
Let’s run the diagnosis:
🧮 Fair Value Estimate (EduInvesting Style)
Assume:
- FY26 PAT = ₹500 Cr (20% growth)
- Assign 35x–40x P/E for a hospital chain
➡️ ₹500 Cr × 35 = ₹17,500 Cr → ₹438/share
➡️ ₹500 Cr × 40 = ₹20,000 Cr → ₹500/share
🎯 Fair Value Range = ₹438–₹500
(Current = ₹633 → 26–30% overvalued)
🧠 6. What Makes KIMS Stand Out?
✅ Focused on high-growth, underpenetrated regions
✅ Efficient capital deployment
✅ Hub-and-spoke model = scale + cost savings
✅ Not chasing elite metros — they let Apollo burn cash there
But…
🚫 No dividends — despite ₹415 Cr PAT
🚫 Valuation mismatch
🚫 ROCE declining (from 34% in FY22 → 15% in FY25)
🚫 High capex = risk of margin dilution
🔍 7. Shareholding Check-Up
- Promoter stake: Stable at 38.8%
- FIIs: Peaked at 20.5% in Dec ’22 → now 15.4%
- DIIs: Very bullish — own 32%
- Public: Only 13.8%
Translation: Mutual Funds love KIMS. Retail doesn’t even know it exists.
🧠 Final Prognosis: Buy Now or Discharge?
KIMS is not cheap, but it’s:
- Efficient
- Growing
- Regionally dominant
- Still under-penetrated in India’s healthcare boom
But until PAT surges or EPS crosses ₹15 — this isn’t a value buy.
If it drops below ₹550 — could be a smart entry.
At ₹630+ — watchlist, not watch-buy.
🧮 TL;DR (Too Lazy? Here’s Your Summary Shot)
- 🏥 Tier-2 hospital king of South India
- 💰 FY25 PAT = ₹415 Cr, margins steady at 25–26%
- 📉 Stock P/E = 67 — among most expensive in hospital pack
- 🚧 CWIP = ₹1,200 Cr → Big expansion ahead
- 🎯 Fair Value = ₹438–₹500
- 📈 Long-term good; short-term fully priced
✍️ Written by Prashant | 📅 22 June 2025
📌 Tags: KIMS hospitals, Andhra Telangana healthcare, hospital stock India, healthcare stocks, medical IPOs, expensive PE stock, KIMS vs Apollo vs Max
