KIMS Hospitals Expansion Explained | CMD On New Hospitals, Occupancy & Profitability

Added: 2026-05-19

[00:00:00]uh which is Kimsh because some of these this sector has delivered and KIMS has been no different it's delivered on the growth numbers uh in quarter 4 for Kim though the margins maybe had a bit of a blink now strong patient inflows are driving revenues the question only is with the expansion let costs etc will operating leverage come under pressure because of lower occupancy I think all of that will be asked but before we get the management on these plans Vasha Johnson with more details VA >> well you There was a good revenue growth though. Yes, you rightly pointed out that there was a dip in margins. So the revenue growth remained strong which was driven by higher patient volumes and expansion and the margin dip was you know due to ramp up of new hospitals and lower occupancy new units. New geographies like Kerala and Karnataka are still in loss phase dragging margins and the occupancy levels if you see maintained low at 50% impacting operating leverage. Maharashtra revenue nearly doubled in FY26. Imp occupancy over there improved sharply. And lastly, Kerala and Karnataka are in investment phase. Kerala operations started scaling from October 24 and has be Karnataka operations has been begin from August 25 and both markets are currently impacting profitability. So we need to know how this all these you know geographies will have a good ramp up in future.

[00:01:20]In fact, let's ask uh uh Miss Dr. Bhaskar Raalo who's a chairman and managing director of Kim's hospital joining us right now uh to talk about some of these aspects. Uh Dr. Rao, as always, an absolute pleasure speaking with you. Um I must ask though and this is something that has occurred to me with regard to health care providers in the country. Before we get into certain other aspects, there was a trend that was being seen of medical tourism. Has that taken a bit of a backseat in light of the crisis and the fact that people are maybe pushing back on travel and maybe pushing it down the road?

[00:02:01]Yeah, it happened in the beginning beginning when the war started and later on I think uh it improved uh but not the extent of it's supposed to used to do but there is a 50% improvement is there when compared to the war starting day.

[00:02:17]So the that's why now and the when the war started there are so many patients who are taking treatment here they continue to take the treatment and then after the once the restoration of the uh flights I think they have been gone back so it's not on the whole it may not be affected too much yes in the beginning 50% affected but now it has come back to 80%.

[00:02:43]So uh and that seems to have driven your uh your your performance as well. The the revenue growth is driven by volumes as well as uh the expansion that you have undertaken. So can you give us a sense on how much of the contribution came through from the expansion?

[00:03:00]>> So basically um what we have anticipated we have done much more than what our anticipation is. I will explain to you as long as the matured units that is our nearly two two and a half decades old hospitals also had shown some growth of 5 to 8%. That means the margins the revenue growth is improving 8 to 10%. Even the IITA margins also has increased as we anticipated and it is made around 29 30% of the profit margins. Whereas the new assets which we are anticipated if you take it and unit by unit uh when we took over about 4 years back about Nagpur and Sri Sunshine they have been already done wonderful job and uh they have been come under the category of matured units. Those two also keep growing and later on we added the nasi sangli I mean the tane tane unit has been about two quarters operations it is almost come to a zero uh so that is a great achievement because new place and the new territory nasi has also showed a little bit drag than what we expected about couple of quarters What we didn't anticipate is usually it will be 20 25% on the insurance business whereas these areas the insurance business is much more than what we anticipated and because of lot of things that is happening in the incident side that also taking a little longer time to empanel. Once that empanelment comes then uh we can also do both Tanya as well as Nasi will do definitely more than what we anticipated. Coming back to Karnataka Karnataka is opened about two quarters back in Mahadeurra. There are two hospitals two about 350 beds each.

[00:05:06]So the madura within 7 to 8 months it has been turnar around doing good job and then the eetita is also zero or little bit of positive whereas 3 months last December we opened the electronic city it actually supposed to open about two quarters before but it got delayed one quarter because of the permissions and other things. So that also now opened that also ramping up very well and in the next two to three quarters that also will become better and even a bit of positive. So on the whole if you look into the next two to three quarters Karnataka will become a bit positive. Canada is doing very well from day one there is not much of a loss funding or required as we anticipate.

[00:05:54]>> So so Dr. Now my question to you is uh yes there have been you know certain delays when you talk about new commissionings that are happening.

[00:06:02]However for FI27 as a year uh will it be a transition from capital deployment to commercial stabilization which will also help you improve your margins number one and improve your profitability. And if you could just help us understand from the new facilities that are coming up uh which of the facilities will actually be break even in the first half of FI27 versus the second half.

[00:06:31]So the actually the Mahadeurra in Bangalore and Tane is already and uh Nasi all these three will break even even positive ATA a single digit in this next 6 months first half the second half Mahopura I mean electronic city will also be turn around maybe we are starting one in Pali that will also come into the second half of this one show positive EITA. And third is we started in Telangana Kafur facility which is already having a 250 bed hospital. Now we are moving on to a a new facility of 850 beds. In the one quarter we may have to run the both the facilities that may give a little bit of 20 25 crores down.

[00:07:24]Even though hospital do well and there may not be any negative thing because of the extra burden of recruiting manpower and running the both the hospitals as you see that when we are doing the same thing in sunshine it also took about one quarter to ramp up. So after next I mean second quarter that also will show much better than what we are anticipating. As far as Kerala is concerned all the units from day one it is a asset like model and we don't have much of a loss funing as of today we have started a little bit of colum the card that will able to take another quarter to turn around uh these are all important things in as far as K is concerned >> okay so these are you know uh commercialization strategies that you have Dr. And in terms of where average revenue per occupied bed goes where are you seeing that move from where do you ended in FI26 if you have to look at FI27 what's that growth uh that will come in >> there may be actually if you see in the 26 itself the moment when we started the uh Karnataka and Tane the average revenue operating bid has gone up to nearly around 10%. And once the ramp up happens both the transplant program complex cases in both the Maharashtra and Karnataka then we may expect this year also another 10% increase in that.

[00:08:51]>> Uh Dr. Ra so based on what you're saying the occupancy is going to increasingly inch upwards but what is internally that expectation if you see it progress through FY27 where would you like to end FY27 at at the occupancy level >> see the occupancy levels will definitely improve another uh uh 7 basic problem here in the occupancies whereas in nearly 1500 00 beds has been opened in this quarter in this year. This 1500 bets may not able to fill at a time. So it will take its own. Now out of that we have been put only 500 600 beds. In this 600 beds there is around 30 to 45 50% occupancy is there. Whenever we touch the 70 80% then we keep on adding some more beds. During that time we don't need any capex. It is only the manpower of any extra 100 bets we need to utilize in all three places that only will supplement as we look at is in this year the revenue growth we are expecting around 25 to 30% growth in the bottom line what on the consolidated base as on today we are doing around 20% of the margins that also can able to increase around uh another 10 to 15% uh up in the next year >> okay I'm glad that you give us those those answers without us asking. Dr. Vascar, always a pleasure speaking with you. Wish you all the best. Firefight 27. Look forward to speaking to you again.