KIMS Q2FY26: Weak Margins Drag Performance; Maintain REDUCE with TP ₹630

Krishna Institute of Medical Sciences (KIMS) reported Q2FY26 revenue in line with expectations, but profitability was impacted by continued losses in new clusters. EBITDA margin contracted sharply by 760bps YoY to 21.2%, dragged by losses of ₹96mn in Maharashtra (-100bps) and ₹255mn in Karnataka (-265bps), along with lower margins in the Kerala cluster. The core Telangana and Andhra Pradesh hospitals remained steady, posting revenue growth of 10.1% and 16.1% with strong margins of 31% and 27.7%, respectively. Management expects the Thane and Nashik hospitals (Maharashtra cluster) to break even in the next few months as insurance empanelment progresses. Margins are guided to recover to 27–30% over the next 2–3 years as new units ramp up. We trim FY26E/FY27E EBITDA by ~6%/2% to factor in start-up losses from new hospitals. Maintain REDUCE rating with a revised Target Price of ₹630 (from ₹660), based on 27x FY27E adj. EV/EBITDA. 📊 Outlook: EBITDA CAGR: 21.3% (FY25–28E) Revenue CAGR: 23.1% (FY25–28E) Margin recovery expected as new hospitals stabilize #KIMS #Q2FY26Results #HospitalStocks #HealthcareSector #EarningsUpdate #StockMarketIndia #StockYardResearch #EBITDA #RevenueGrowth #HospitalExpansion #Telangana #AndhraPradesh #Karnataka #Maharashtra #ReduceRating