Brokerage firm Investec has initiated coverage on Krishna Institute of Medical Sciences (KIMS) with a 'buy' rating and target price of ₹1,000 per share. According to reports from CNBC TV18, this target indicates an upside of 32.7% from KIMS' previous closing price. The brokerage believes KIMS is entering a strong growth phase, expecting its sales and earnings before interest, Tax, Depreciation and Amortisation (EBITDA) to grow at a Compounded Annual Growth Rate (CAGR) of 25% and 33% respectively over financial year 2026-2029. The positive sentiment is reflected in today's market performance, with KIMS shares gaining momentum following Investec's coverage initiation.
As reported by CNBC TV18, Investec's projections are based on the focus shifting from capacity creation to monetising its expanded base across Maharashtra, Karnataka, Kerala, compared to the current focus on Andhra Pradesh and Telangana. The brokerage expects improvement through higher average revenue per occupied beds, profitability in comparison to the current focus on Andhra Pradesh, Telangana. Investec believes KIMS' FY26 occupancy of 51% and earnings before interest tax depreciation amortisation and managment fees (EBITDAM) of 21% are near cyclical lows, post the recent expansion. This strategic pivot positions KIMS for enhanced profitability as it expands its geographical footprint across multiple states.
According to CNBC TV18, KIMS reported its first quarter earnings last month, with revenue increasing by 35.3% to ₹1,179.5 crore from ₹871.6 crore in the first quarter last year. However, net profit for the April-June period declined by 47.2% to ₹41.5 crore from ₹78.6 crore last year. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 16% to ₹223.4 crore from ₹192.6 crore in the previous fiscal, though margins contracted to 18.9% from 22.1% in the year-ago period. The mixed financial results reflect the company's transition phase from capacity expansion to operational optimization.
As reported by CNBC TV18, shares of Krishna Institute of Medical Sciences are trading 2.3% higher on Thursday at ₹770.7. The stock is down 6% in the last one month, thereby trimming its year-to-date advance to 25%. According to the report, only one among the 20 analysts who have coverage on KIMS have a 'sell' rating on the stock, with the others having a 'buy' recommendation. The positive analyst sentiment reflects confidence in KIMS' expansion strategy and growth prospects across its multi-state operations, with today's gains reflecting investor optimism following Investec's bullish coverage initiation.
