Krishna Institute of Medical Sciences Ltd.’s Q2 operating performance was in-line with our estimate; reported Ebitda growth of 16% YoY to Rs 1.8 billion.
KIMS’ robust cost control, low capital intensive set-up and value accretive acquisitions have ensured good profitability in the past (with Ebitda growth of 34% compound annual growth rate over FY18-23).
Also recent acquisitions of Sunshine, Nashik and Nagpur are value accretive which will continue to aid growth momentum, in our view.
We expect 15% Ebitda CAGR over FY23-25E with healthy return ratios of ~20%. Our FY24E and FY25E Ebitda estimates broadly remains unchanged.
We maintain our ‘Buy’ rating with a target price of Rs 2,000/share (unchanged) based on 22 times September 2025E enterprise value/Ebitda.
At current market price, the stock is trading at 23 times EV/Ebitda (adjusted for partner’s stake) and 38 times price/earning on FY25E.
Any delay in expansion plan will be key risk to our call.