KIMS projects 20–25% annual revenue and EBITDA growth through FY28

Krishna Institute of Medical Sciences KIMS Hospitals, one of India's leading hospital chains, has outlined ambitious growth plans, projecting 20–25% annual revenue and EBITDA expansion over the next three to four years. The hospital group is gradually scaling up operations in its newly opened facilities in Bangalore, Thane, Nashik, and Telangana.

Speaking to CNBC-TV18, Bhaskar Rao, Chairman and Managing Director of Krishna Institute of Medical Sciences (KIMS), said the Mahadevapura facility in Bengaluru, which has a 450-bed capacity, has opened 150 beds so far and reached about 15% occupancy within the first three weeks. "Moving forward, for these 150 beds, in the next quarter, we may reach around 30% occupancy," Rao added.

He explained that full staffing is a gradual process, with only half of the doctors currently on board for Bengaluru, and the rest joining over the next few months. "From day one, we cannot operate all beds at full capacity. We need to employ more nursing staff, paramedical staff, and doctors," he explained.

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In Mumbai, the Thane facility, opened four months ago with 150 operational beds, has reached 30–35% occupancy and is on track to achieve operational break-even by the fourth quarter.

The Nashik facility, Rao noted, has experienced delays in reaching break-even due to pending insurance approvals but is expected to ramp up once these are in place. In the Telangana cluster, the group is maintaining a 5-6% volume growth, with plans to open two more facilities by the fourth quarter, which would improve growth metrics.

Below is the verbatim transcript of the interview.

Q: You've started operations in Bangalore. The new hospital is a 450-bed hospital. Could you give us a sense of occupancies? What are you expecting in a very competitive environment?

Rao: In Bangalore, we started this month the Mahadevapura KIMS facility, which is around 450 beds. Only 150 beds have been opened so far, and within the last three weeks, we are already reaching about 15% occupancy.

Moving forward, for these 150 beds, in the next quarter, we may reach around 30% occupancy. The average operating cost per bed is at the level of ₹65,000 per bed, and the revenue per patient will be around ₹2 crores, which is in line with the market in Bangalore. Maybe we are slightly lower, about 10% below our peer groups.

Similarly, in Mumbai, we opened nearly four months ago in Thane, which is also doing very well. We have reached around 30–35% occupancy over the last four months, with a 150-bed capacity as well.

Q: You mentioned 150 beds are operational now. What about the remaining 300? When do you expect all 450 beds to be operational?

Rao: All 450 beds have been prepared. The only thing is we need to employ all the nursing and other staff for the 150 beds first. From day one, we cannot operate all beds at full capacity. We need to employ more nursing staff, paramedical staff, and doctors. Currently, 50% of the doctors are already on board, and the remaining 50% will join over the next couple of months. Whenever there is a need, we will bring the remaining staff online.

Q: And by when do you expect this facility to break even? How long does it typically take for a new facility to break even and reach company-level margins?

Rao: Operational break-even is usually expected around six to nine months, sometimes up to 12 months. Right now, even within one month we have 10–15% occupancy of the 150 beds. So, by the end of 12 months, we should be able to break even and generate cash flows sufficient to repay our loans.

Q: What is the total debt on your books, and how much do you need to repay, considering you have opened several new hospitals recently?

Rao: For the Bangalore facility, we have spent nearly ₹800 crores. Out of that, around ₹300 crores is equity and ₹500 crore is debt. This is across two facilities, which total 800 beds. The cost per bed comes to roughly ₹1.10 crore which is very reasonable for the facilities.

Q: Let’s narrow down on your Mumbai operations. You mentioned 30–35% occupancy. Your earlier guidance was to break even by Q3. Is that on track?

Rao: Yes, it is on track.

Q: So, you should be EBITDA positive by Q3?

Rao: Operational break-even will be achieved by Q4.

Q: What about Nasik? That facility had a slower ramp-up. Are you seeing any improvements in occupancy and insurance tie-ups?

Rao: In Nasik, we initially expected to break even in six to nine months, but it has been delayed due to operational issues. Insurance approvals are still pending, but once they are in place, growth will be faster.

Q: Dr Rao, regarding the Telangana cluster, you had mentioned maintaining 5–6% volume growth. Are you still on track, and do you see improvement going forward?

Rao: As of now, we are maintaining that growth. By January, we plan to open another two facilities. Once these are operational in the fourth quarter, volume growth will improve further.

Q: Could you give us a longer-term projection? By FY28, what room capacity are you targeting, and how will existing facilities mature? What system-wide revenue, occupancy, and EBITDA margins do you expect?

Rao: Based on current trends, we expect around 20–25% growth in top line and EBITDA year on year for the next three to four years.

Q: Dr Rao, your burn rate for the new hospitals: You did around ₹21 crores last quarter. What can we expect in the coming quarters, especially with Nasik taking longer to break even?

Rao: Losses will not be too high. We expect around ₹25 crores for this quarter. Moving forward, the burn rate will decrease in Q4FY26 and Q1FY27. By the end of Q4FY27, we expect the burn to be eliminated, with no further funding required.