NephroPlus: Net Profit Rises 35% in Q1FY27

Nephrocare Health Services runs dialysis centres under the NephroPlus brand using an asset-light model. It places centres within partner hospitals, reducing upfront capital needs while reaching Tier-2 and Tier-3 towns. It claims more than 50% of the organised Indian dialysis market by clinic count. What happened: In Q1FY27, revenue grew 23.7% year on year to Rs 281.8 crore and net profit rose 35% to Rs 32 crore. EBITDA margin expanded 120 basis points to 23.1%. In FY26, revenue grew 32.2% to Rs 998.8 crore and adjusted net profit grew 74.6% to Rs 128.3 crore. EBITDA margin was 22.7% and debt-to-equity fell to 0.02 times. The company operated 487 clinics across 307 cities in Q1FY27, with 80% in Tier-2 and Tier-3 towns. Why it matters: International operations in Nepal, Uzbekistan, Saudi Arabia and Philippines now contribute about 45% of revenue. Higher realisations abroad lifted revenue per treatment 9.2% to Rs 2,733 in Q1FY27. ROCE stands at 22.8% and the debt-to-equity at 0.02 times makes this a near debt-free business. What I am watching: Receivable days stood at 101 in FY26, reflecting the working-capital cost of government hospital partnerships, where collections take longer. Dialysis needs trained renal nurses, a scarce resource that can slow clinic additions. Management targets 40 to 50 new clinics a year. Whether 35% profit growth can remain with margins still below 25% is the key question. My stance: Near-zero debt, 35% profit growth and international traction are genuine positives. But 22.7% EBITDA margins are thin for a healthcare business at 72.6 times earnings. Cash conversion must improve materially before the valuation makes sense. I do not hold a position in NephroPlus at the time of writing. This is not investment advice.