Investec has initiated coverage on KIMS with a “buy” rating and a target price of ₹1,000 per share. This indicates an upside of 32.7% from its previous closing price.
The brokerage said KIMS is entering a strong growth phase, and expects 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.
It makes these projections as the focus shifts from capacity creation to monetising its expanded base across Maharashtra, Karnataka, Kerala, in terms of higher average revenue per occupied beds, profitability in comparison to the current focus on Andhra Pradesh, Telangana.
Investec said it believes the 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.
The brokerage further said that this should improve gradually towards its historic EBITDAM levels of 25% as newer hospitals ramp up, contribution from higher average rate per occupied bed markets rises, specialty mix improves and operating leverage kicks in.
KIMS reported its first quarter earnings last month.
Net profit for the April-June period declined by 47.2% to ₹41.5 crore from ₹78.6 crore last year.
Its revenue though, increased by 35.3% to ₹1,179.5 crore from ₹871.6 crore in the first quarter last year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 16% to ₹223.4 crore from ₹192.6 crore in the previous fiscal.
Its margins contracted to 18.9% from 22.1% in the year-ago period.
Only one among the 20 analysts who have coverage on KIMS have a “sell” rating on the stock. The others have a “buy” recommendation.
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%.
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