Nephrocare Health Services Q2 FY27 Results (NSE: NEPHROPLUS)
Signal: Margin pressure
The read
The trajectory is still volume-and-yield led, with Q2 revenue up 23.5% YoY on treatments up 12.0% and revenue per treatment up 10.3%, but the key inflection is margin dilution: adjusted EBITDA growth slowed to 3.3% and margin fell 443bps to 22.7% as the company expanded to 570 clinics across 6 countries and invested in new markets; adjusted PAT nevertheless grew 28.7% to ₹39.3 crore. H1 revenue growth of 23.6% exceeded the stated 15–20% guidance, but returns during the international ramp remain the central execution question.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹303.4 Cr | 23.5% | N/A |
| Net profit | ₹39.3 Cr | 28.7% | |
| EBIT margin | 22.7% |
P&L walk
Revenue grew 23.5% YoY to ₹303.4 crore, supported by 12.0% treatment growth and 10.3% higher revenue per treatment, while adjusted EBITDA grew only 3.3% to ₹68.9 crore and margin contracted 443bps to 22.7%; adjusted PAT rose 28.7% to ₹39.3 crore, but the release does not provide statutory P&L, depreciation, finance-cost or EPS lines.
Key positives
- Revenue reached ₹303.4 crore in Q2FY27, up 23.5% YoY, with treatments up 12.0% and revenue per treatment up 10.3% to ₹2,835, showing both volume and yield support.
- H1FY27 revenue grew 23.6% to ₹585.2 crore, above the stated 15–20% guidance range, while adjusted PAT rose 34.7% to ₹76.1 crore and adjusted PAT margin expanded 107bps to 13.0%.
- The network reached 570 clinics across 6 countries, with international markets contributing approximately 47% of revenue; Kazakhstan adds a sixth-country platform and the Philippines reached 55 clinics after 10 acquisitions in H1FY27.
- H1FY27 capex of ₹102 crore added 40 Indian clinics and 11 Philippine clinics, while 69% of EBITDA converted into cash and liquidity exceeded ₹500 crore.
Key concerns
- Adjusted EBITDA margin fell 443bps YoY to 22.7% in Q2FY27 and 165bps YoY to 23.0% in H1FY27, indicating near-term profitability dilution during international expansion and network investment.
- Adjusted EBITDA grew only 3.3% YoY to ₹68.9 crore in Q2FY27 versus 23.5% revenue growth; the filing does not provide the line-item cost bridge needed to assess whether the pressure is temporary ramp-up cost or structural.
- International revenue is now approximately 47% of revenue, increasing exposure to new-country ramp-up execution; management explicitly expects margins and returns to move during the ramp-up.
- Reported statutory PAT and EPS are not disclosed in the press release; adjusted PAT excludes ₹3.9 crore of share of JV loss and ₹1.8 crore of ESOP expense in Q2FY27.
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