Krishna Institute of Medical Sciences (KIMS) has entered into an Operations and Management (O&M) Agreement with Sarvottam Health Care Private Ltd to exclusively manage and operate its 183-bed hospital in Kakinada, Andhra Pradesh. According to reports from CNBC TV18, the agreement was signed on Thursday (September 10, 2026) and provides KIMS with exclusive supervision and control of the hospital, making it solely responsible for proper operation and management. The hospital operates under the brand name Trust Multi Speciality Hospital and has been in operation since 2010, beginning with 50 beds before commissioning an additional 183 beds after inaugurating a new hospital building in 2021. The agreement is effective from September 10, 2026, with an initial term of 5 years and an exclusive option for a further 5-year extension.
Under the agreement, KIMS will receive a revenue fee of 9% of the hospital's net revenue for an initial five-year term, extendable by another five years. As reported by CNBC TV18, net revenue is defined as gross revenue billed to patients after deducting concessions and discounts offered to patients. The hospital is spread across a built-up area of approximately 9,847.23 square metres on company-owned land measuring 3,001.36 square yards. KIMS will also provide or facilitate the provision of medical services covered under the agreement, enabling Sarvottam Health Care Private to benefit from its management expertise while expanding KIMS' presence in Andhra Pradesh. This asset-light model provides KIMS access to the Kakinada micro-market with zero upfront capital expenditure, bypassing traditional construction gestation.
KIMS reported strong financial performance in Q1 FY27, with consolidated total revenue of ₹1,196 crore, growing 36.1% year-on-year. Operating revenue rose to ₹1,179.50 crore in Q1 FY27 from ₹871.60 crore in Q1 FY26, representing a growth of 35.3%. However, consolidated EBITDA increased to ₹240 crore from ₹193 crore, though EBITDA margin contracted slightly to 20.1% from 22.7% due to expansion gestation. Consolidated net profit declined to ₹37 crore in Q1 FY27 from ₹85 crore in Q1 FY26, heavily impacted by elevated finance and operational costs of newly opened hospital units. The company utilized its ₹1,500 crore QIP proceeds to reduce total debt to approximately ₹2,400 crore.
Shares of Krishna Institute of Medical Sciences Ltd ended at ₹774.00, up by ₹1.20, or 9.20% on the BSE following the announcement. According to CNBC TV18, the positive market reaction reflects investor confidence in the strategic expansion of KIMS' hospital network through this management agreement in Andhra Pradesh. The O&M agreement demonstrates KIMS' strategic pivot toward asset-light, capital-efficient expansion, addressing investor concerns regarding aggressive capital expenditure. By securing a 9% top-line fee without committing equity or debt capital, KIMS will generate incremental earnings that directly support margins while insulating its balance sheet from debt accumulation. The agreement includes an initial term of 5 years with an exclusive option to renew for an additional 5 years, providing long-term strategic stability.
