Krishna Institu. Q1 FY27 Results (NSE: KIMS)
Signal: Margin pressure
The read
Revenue growth accelerated to 35% YoY, the fastest in the last five quarters, driven by new hospital additions and higher volumes. However, operating profit margins continued to shrink (5th consecutive quarter of OPM contraction), falling ~240bps YoY as employee and other expenses rose faster than revenue. Finance costs more than doubled, compressing net profit. The QIP dilution (60% more shares) exacerbated EPS decline to ₹1.04. While standalone operations showed improvement (EBITDA margin 30.8%, PAT +13%), the consolidated picture is weighed down by loss-making subsidiaries and debt costs.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,179.5 Cr | 35.3% | 9.8% |
| EBIT | ₹139 Cr | -5.0% | |
| Net profit | ₹41.5 Cr | -47.2% | |
| EPS | ₹1.04 | -46.9% | |
| EBIT margin | 20.3% |
P&L walk
Revenue growth accelerated to 35% YoY, but margin compression continued for the fifth consecutive quarter. EBITDA margin fell ~240bps YoY to 20.3% as employee costs (+41% YoY) and other expenses (+45% YoY) outpaced revenue growth. Finance costs surged 156% YoY to ₹83.4 Cr due to expansion debt. PAT dropped 47% YoY to ₹41.5 Cr, with EPS at ₹1.04 after QIP dilution. Other income contributed 29.5% of PBT, masking weaker operating performance.
Key positives
- Consolidated revenue grew 35.3% YoY to ₹1,179.5 Cr, the highest growth rate in the last five quarters.
- Standalone EBITDA margin expanded to 30.8% (up 210bps YoY), indicating core hospital operations are improving cost efficiency.
- Successfully raised ₹1,500 Cr via QIP and ₹600 Cr via warrants, strengthening balance sheet for future expansion.
Key concerns
- OPM contracted ~240bps YoY to 20.3% — the fifth consecutive quarter of margin compression, reflecting structural cost pressures from expansion.
- Finance costs surged 156% YoY to ₹83.4 Cr (7.1% of revenue), driven by debt-funded acquisitions and capex; interest coverage below 2x.
- PAT attributable to owners fell 47% YoY to ₹41.5 Cr, despite 35% revenue growth, due to margin erosion and higher interest.
- EPS diluted to ₹1.04 (down 47% YoY) as QIP added 60% more shares; diluted EPS impact will persist.
- Other income contributed 29.5% of consolidated PBT, raising quality-of-earnings concerns — core operations are less profitable than reported.
Earnings quality: includes non-operating other income
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