Release Date: May 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gross revenue increased by 9.8% year-on-year and 4.7% quarter-on-quarter, reaching INR6,376 million.
- EBITDA grew by 8.3% quarter-on-quarter, despite a year-on-year decline.
- Operational highlights show growth in both IP and OP volumes, with OP volumes increasing by 7.9% year-on-year.
- KIMS entered into a definitive agreement for a new hospital in Thane, Mumbai, expected to be operational by Q4 2025.
- The company has seen positive developments in its Sunshine Hospital, with good consultant joinings and expected EBITDA growth.
Negative Points
- EBITDA margin declined to 25.5% in Q4 FY24 from 28.9% in Q4 FY23.
- PAT decreased to INR716 million in Q4 FY24 from INR987 million in Q4 FY23.
- There was a one-time expense of INR10 crore, impacting EBITDA negatively.
- Depreciation costs increased significantly from INR35 crores to INR46 crores due to new operational facilities.
- There is muted growth in Telangana due to bed capacity issues and delayed doctor engagements.
Q & A Highlights
Q: Can you share more details on the INR10 crore expense, which led to a decline in EBITDA?
A: These expenses were largely incurred at KIMS Secunderabad and KIMS Kondapur for renovating the current facility and starting a large rehab program in the old Sunshine Hospital. These were nonrecurring expenditures incurred in Q3 and Q4, and we don't foresee similar expenses in Q1 and moving forward. (Sachin Salvi, CFO)
Q: Depreciation cost in this quarter has seen a sudden spike from INR35 crores to INR46 crores. Is this the new run rate we should assume going forward?
A: The increase in depreciation cost is due to the commencement of operations at the Begumpet Hospital in December 2023. This will remain at the same level in the coming quarters unless we add any other facility. (Abhinay Bollineni, CEO)
Q: Update on the O&M contract for Bangalore. When will it be completed?
A: The contracts are ready, and we should be announcing the final signed SPA mid-next week. (Abhinay Bollineni, CEO)
Q: Is 4Q FY24 fully incorporating the benefits of rental cost savings at Sunshine?
A: In Q4, we incurred close to INR3 crores of nonrecurring costs at Sunshine. The normalized EBITDA for Sunshine in Q4 would have been around INR32.5 crores, indicating a margin of 26.5%. (Sachin Salvi, CFO)
Q: For new facilities like Nagpur and Thane, is there any P&L charge yet?
A: There is no P&L charge yet for Nagpur and Thane. However, we are incurring some costs as we have hired resources for Nashik and Thane. (Abhinay Bollineni, CEO)
Q: What is the fixed cost buildup for new facilities like Nashik and Thane?
A: For Nashik, we anticipate fixed costs to be around INR7 crores to INR7.5 crores per month. Thane will be slightly higher by 20%-30%. (Sachin Salvi, CFO)
Q: What's happening with occupancy in AP Telangana?
A: Both AP and Telangana together have delivered a 10% growth in revenue. There has been some delay in hiring senior doctors in Telangana, but we expect growth to pick up in the coming quarters. (Sachin Salvi, CFO)
Q: What is the outlook for ARPOB growth in AP as a cluster?
A: The ARPOB growth is a function of reducing ALOS and increasing ARPOB. The average of FY24 is a good ballpark to look at year-on-year growth. (Sachin Salvi, CFO)
Q: Can you comment on the competitive dynamics in the Kondapur region?
A: Despite the addition of bed capacity in the last few years, we have not seen significant doctor attrition at KIMS Kondapur. We are confident in attracting more clinical talent and adding new specialties once the new facility is operational. (Abhinay Bollineni, CEO)
Q: What is the strategy for the Bangalore macro market where new units are opening?
A: We are opening two hospitals in Bangalore: a 450-bedded hospital in Marathahalli and a 300-bedded hospital in South Bangalore. Both hospitals are in underserved micro markets, and we are confident about their potential. (Abhinay Bollineni, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
