KIMSNSEQ4 FY22May 20, 2022

Krishna Institute of Medical Sciences Limited

9,303words
130turns
11analyst exchanges
4executives
Management on call
Bhaskar Rao Bollineni
FOUNDER AND MANAGING DIRECTOR
Abhinay Bollineni
EXECUTIVE DIRECTOR AND CHIEF EXECUTIVE OFFICER
Vikas Maheshwari
CFO
Rahul Jeewani
IIFL
Key numbers — 40 extracted
5%
the results of quarter four FY2021-FY2022, the consolidated total income showed an increase of 5% against quarter four FY2020-FY2021 which stood as Rs.3805 million for Q4, FY2021- FY2020. Consolid
Rs.3805 million
solidated total income showed an increase of 5% against quarter four FY2020-FY2021 which stood as Rs.3805 million for Q4, FY2021- FY2020. Consolidated EBITDA for Q4, FY2021-FY2022 had showed an increase of 16%
16%
illion for Q4, FY2021- FY2020. Consolidated EBITDA for Q4, FY2021-FY2022 had showed an increase of 16% corresponding period for Q4, FY2020-FY2021 stood at Rs.1218 million for Q4 FY2021- FY2022. Now
Rs.1218 million
, FY2021-FY2022 had showed an increase of 16% corresponding period for Q4, FY2020-FY2021 stood at Rs.1218 million for Q4 FY2021- FY2022. Now, I will present details for the full financial year FY2021-FY2022:
25%
2021-FY2022: The consolidated total income for financial year 2021-FY2022 recorded as increase of 25% at Rs.16,711 million over the FY2021, which was Rs.13401 million. Consolidated EBITDA grew by 4
Rs.16,711 million
22: The consolidated total income for financial year 2021-FY2022 recorded as increase of 25% at Rs.16,711 million over the FY2021, which was Rs.13401 million. Consolidated EBITDA grew by 41% from Rs.3800 million
Rs.13401 million
cial year 2021-FY2022 recorded as increase of 25% at Rs.16,711 million over the FY2021, which was Rs.13401 million. Consolidated EBITDA grew by 41% from Rs.3800 million to Rs.5360 million for FY2021-FY2022 mainly
41%
% at Rs.16,711 million over the FY2021, which was Rs.13401 million. Consolidated EBITDA grew by 41% from Rs.3800 million to Rs.5360 million for FY2021-FY2022 mainly due to a case mix, peer mix and
Rs.3800 million
.16,711 million over the FY2021, which was Rs.13401 million. Consolidated EBITDA grew by 41% from Rs.3800 million to Rs.5360 million for FY2021-FY2022 mainly due to a case mix, peer mix and cost optimization. Co
Rs.5360 million
r the FY2021, which was Rs.13401 million. Consolidated EBITDA grew by 41% from Rs.3800 million to Rs.5360 million for FY2021-FY2022 mainly due to a case mix, peer mix and cost optimization. Consolidated PAT saw
67%
022 mainly due to a case mix, peer mix and cost optimization. Consolidated PAT saw an increase of 67% from Rs.2055 million to Rs.3438 million. EBITDA margin grew from 28% previous year to 32% in curr
Rs.2055 million
y due to a case mix, peer mix and cost optimization. Consolidated PAT saw an increase of 67% from Rs.2055 million to Rs.3438 million. EBITDA margin grew from 28% previous year to 32% in current year. primarily
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Guidance — 20 items
The clinical achievements during this quarter
opening
“I am sure you will find it useful; we have your e-mail ids with us and with your permission we will be sending you the bulletins that will be beneficial to you.”
The clinical achievements during this quarter
opening
“That we will be on the forth front in serving the patients and also protecting them and promoting the interest of our investors.”
Praveen Sahay
qa
“So, can you a give guidance related these facilities, how you are looking at?”
Vikas Maheshwari
qa
“Capex for FY2023, it all depends upon the opportunity which we are pursuing and rectifying, so we expect this, Bangalore we have taken the definitive step and the Nashik we have taken the definitive steps.”
Vikas Maheshwari
qa
“So, on these two assets, we have already told that in the Nashik we will spending roughly in the first phase Rs.160-180 crores to set up first phase of the hospital and for the Bangalore, we will be spending something like that Rs.325-350 crores.”
Vikas Maheshwari
qa
“So, we expect that Nashik money to go in the next 12 months’ time and Bangalore of almost 70%-75% and all depends upon the balance opportunity which we are pursuing right now.”
Anubhav Agarwal
qa
“So, you guys have 51% stake 160-180 crores is all what you will be putting in, so Dr.”
Management
qa
“The project cost estimated to be at around 160-180 crores which was the first phase and out of that roughly Rs.90-Rs.100 will come as the equity and the balance as a debt.”
Management
qa
“So, we will be infusing something like that Rs.40-Rs.50 crores as equity as this part and balance worth will be infused by Dr.”
Management
qa
“So, we expect the valuation should be at around Rs.40-Rs.50 crores that will come as an equity as this part and then balance we will infuse.”
Risks & concerns — 15 flagged
As far as, Andhra is concern largely about expanding the mature and non-mature hospitals ranging from 50 bed addition to almost 150-200 beds addition.
— Dr. Abhinay Bollineni
As far as Karnataka is concern, because we believe a large opportunity is there, we have a very strong management team on ground, we want to build a greenfield opportunity in that market because very synergistic to AP and Telangana.
— Dr. Abhinay Bollineni
And as far as the debt is concern Praveen there is still net cash surplus company, on the gross debt side we have a debt of roughly Rs.146 crores but against that we have a fixed deposit of Rs.155 crores plus cash balance.
— Vikas Maheshwari
So, in spite of the beds that got added in the last 3-4 years we have been able to scale up pretty well in our existing hospital beyond this year we do not see any more incremental beds most, whatever is getting added is coming from KIMS itself in two of its facility as far as Telangana is concern.
— Management
As far as Andhra is concern, I think there is still a huge opportunity competition is far from few most of the geographies that we operate, except for one or two where competition is caught up and there is a visibility of more beds being added.
— Management
We do not see a major challenge at all in Andhra in scaling up further.
— Management
Raj who has built a phenomenal oncology hospital and who has phenomenal connect is a very good entry strategy, I mean one could not ask for something better and larger than this as far as our entry to Nashik is concern.
— Management
So, as far as the current beds of 3064 bed capacity is concern, I think all those will be operational in the next 12 months actually is the current capacity.
— Management
As far as, the Chennai is concern, it is not because of the competitiveness.
— Management
As far as Karnataka is concern we always were pretty gung-ho about that market we believe that we will have a larger footprint.
— Management
So, we do not see that as a real cost challenge is currently at this point in time.
— Management
Because it is also very difficult, we have not seen hospitals under certain scale in Maharashtra yet.
— Management
As far as, KIMS is concern we will be able to sustain the margins that we have seen in FY2022 and as revenue ramp up happens a large part of that will slow into the EBITDA margin.
— Vikas Maheshwari
As far as, Sunshine is concern we still have been able to be very healthy in the margin profile from where it was when we acquired it versus where it is currently, we have already been able to get to a 20% kind of number.
— Vikas Maheshwari
So, combination of all so it is very difficult to say with the existing facility how much growth can come because it a operational excellence case mix and peer mix etc., But I think with the existing capacity definitely in the mix 2-3 years Dr.
— Vikas Maheshwari
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Q&A — 11 exchanges
Q
The first question is related to the matured SLT i.e., Nellore, Rajahmundry and Srikakulam. If I look at the revenue in the last three years, we have not grown much out there. So, can you a give guidance related these facilities, how you are looking at?
Dr. Abhinay Bollineni
These facilities, yes has not been able to grow in the last years but largely because of capacity constraints. So, all three locations we have taken initiatives where we are going to build new facilities and expand the current hospital which will add more bed capacity and new clinical specialty which will help them grow. All of them are for example Srikakulam, we have already had land parcel in the company for quite some time. This year we are pretty confident we will get permission to scale up the current bed capacity by an incremental 150-200 beds and add a lot of new clinical therapies whic
Q
Just a clarity on that the Nashik that you have mentioned. So, you guys have 51% stake 160-180 crores is all what you will be putting in, so Dr. Nagarkar is not putting his equity?
Management
Anubhav, it is partnership between 51% and 49% with Dr. Nagarkar. The project cost estimated to be at around 160-180 crores which was the first phase and out of that roughly Rs.90-Rs.100 will come as the equity and the balance as a debt. So, we will be infusing something like that Rs.40-Rs.50 crores as equity as this part and balance worth will be infused by Dr. Raj Nagarkar. So, land and building is already in his name so that will come as the equity into the company which is being valued in the process of being valuations. So, we expect the valuation should be at around Rs.40-Rs.50 crores th
Q
Sir I just wanted inpatient revenue and outpatient revenue for entire year and for the quarter.
Management
I can give it roughly Rs. 10811 mn the IP level and the balance is pharmacy and OP revenue. And for the entire year? This is for the entire year, I have told you. Okay. And for the quarter was 240 was the IP revenue and the balance is the pharmacy and OP revenue income. And Sir, one more question on the cash flow front so last year cash from operations were roughly Rs.350 crores which has dipped to Rs.325 crores. So, any specific reason because I see that the taxes paid are almost Rs.37 crores to Rs,127 crores so what is our assessment over there because we will have to reinvest those cash flo
Q
Sir, just wanted understand in term of the operational beds what is the addition that we will see over the next couple year, because I think it has to be meet from your exiting assets only, right?
Management
How many incremental beds are we going to add in the next few years? Two years, yes in terms of operational, you said you have 2246 as operational bed, so this operational bed number should be what in next of couple of years? So, as far as the current beds of 3064 bed capacity is concern, I think all those will be operational in the next 12 months actually is the current capacity. Like is the case with Sunshine, all the beds will be fully operational, the current capacity and then we are looking at new expansion into Nashik. Nashik and Bangalore that is additional but there is any case coming
Q
Can you tell me the guidance for capex which you have mentioned for FY2023 and FY2024.
Management
So, let me rearticulate it well. So, we are pursuing multiple opportunities and based on our past efforts we have been able to close Bangalore and Nashik for which there is a visibility. So, for Bangalore some amount is already spent and we expect in next 18 months’ time the balance amount will go, which will be roughly, Rs.282 crores-Rs.300 crores for the Bangalore. For the Nashik the total commitment of the project is roughly Rs.160-Rs.180 crores, Rs.190 crores depending upon what type of facility and the infrastructure and the hospital we are bring there. So, that total capex outflow will a
Q
You indicated that you have a relook at the Tamil Nadu or Chennai expansion which you were pursuing given that you find the Nashik opportunity to be a better one but did you see anything incremental in the Chennai market in terms of competitive intensity which has allowed you postpone your plans and what gives you confidence with respect to the Bangalore market given that you are saying that the Bangalore expansion is still on track.
Management
As far as, the Chennai is concern, it is not because of the competitiveness. I think it is just that the opportunities that came up in Maharashtra and shaping that cluster currently was taking priority over setting up one hospital in south Chennai. So, we thought it will be more strategic to have these 3-4 assets that we can commission in Maharashtra over the next two years versus trying to do just one facility in Tamil Nadu for now. So, we just postponing the Chennai project for some time nothing has changed in that market or we do not believe anything will change in that market even in the n
Q
Basically Sir, I want to know what type of peer analysis do we do before entering into new markets. So, lets say now we are coming to Nashik, what is our view with regards to some of hospitals over there, like we already have Apollo over there and there are some standalone hospitals also Sahyadri and again HCG in oncology. So, what are the parameters for us to go into these market.
Management
Sure, I think one is at a very high level there is significant supply demand gap because just look at HCG as an example, the amount of revenue or volume they do from just one specialty which is oncology is equal to the sum of all the departments in a hospital like Sahyadri, in a hospital like Medicover and double the revenue of for a hospital like Apollo. So, it is just that, it is very high-level, I will get you the details. We have just seen that the current facilities have capped in shelves at 150 bed, 170 bed, and they have reached a certain capacity on those beds and they have not been ab
Q
Couple of questions on the expansion plan. So, I got the point that Chennai is not top the radar and currently we are focused on Bangalore and Nashik. But still your time is mentioned that in next two years probably Chennai should happen, so if that is the case just wanted to confirm that.
Management
So, I think right now. Yes that looks like the case in two years we will go back and start looking in that project. But if something more good comes up in Maharashtra and Karnataka where we are able allocate capital to Tamil Nadu then we might look at pushing out later. Because, we are really focused on building a greenfield strategy out of Karnataka and acquisition strategy out of Maharashtra. This Bangalore one is greenfield, I mean it is not in partnership, you are not looking for a coed asset. It will be in partnership with local doctors but we still do not have complete commitments from t
Q
Just a clarification on Sunshine Hospital you said about the improvement in the per month revenue and the margin to achieve in the next three years.
Management
That is correct. It is a broader plan of 3 years. And the second on the Sunshine only how much is the capacity at the Secunderabad and how much is the Gachibowli. Secunderabad is around 325 beds and Gachibowli is around 225 beds The third one Karimnagar also operational. Yes, they are operational but that is a very small facility it is around 70 beds. And out that how much is the operational 325 beds in Secunderabad and 225 beds in Gachibowli? All beds are operational.
Q
Sir I just wanted to understand the margin guidance because we have Sunshine dilution because our EBITDA margins are a lower level, then Nashik, so broad level company level what kind of margin are we expecting may be for next couple of years and what kind of inorganic revenue growth and organic growth because almost we are the peak capacity now. So, if you could just give a broad ballpark number with respect to margin and revenue.
Vikas Maheshwari
As far as, KIMS is concern we will be able to sustain the margins that we have seen in FY2022 and as revenue ramp up happens a large part of that will slow into the EBITDA margin. As far as, Sunshine is concern we still have been able to be very healthy in the margin profile from where it was when we acquired it versus where it is currently, we have already been able to get to a 20% kind of number. So, as the ramp up of revenue happens, we are looking to wrap up the revenue almost 50% in Gachibowli and we are looking at almost another incremental 50% revenue coming in Begumpet. So, almost 50%
Q
Thank you very much all the participants and very active discussion that happened and then we will be up to the level what investors are expecting and whatever we promised in the road shows and the expansion plant are going on time. Once again thank you very much for participating.
Management
Speaking time
Management
47
Moderator
13
Bhavya Gandhi
13
Praveen Sahay
9
Anubhav Agarwal
9
Pritesh Chheda
9
Rahul Jeewani
8
Vikas Maheshwari
6
Nidhi Babaria
4
Bhaskar Rao Bollineni
3
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Opening remarks
Rahul Jeewani
Hi good morning every one this is Rahul from IIFL Institutional Equities I welcome you all to the Fourth Quarter Earnings Conference Call of KIMS Hospital and I thank the KIMS management team for giving us the opportunity to host this call today from KIMS we have us Dr. Bhaskar Rao Bollineni – Founder and Managing Director, Dr. Abhinay Bollineni – Executive Director and CEO and Mr. Vikas Maheshwari – CFO. Over to you sir for your opening comments.
Bhaskar Rao Bollineni
Good morning, Rahul, and all the investors who are present on this day. I extend a hearty welcome to all of you for the investor’s meeting. The corona wave has gone but the heat wave is on. The country is reeling under sweltering heat and I hope you are taking all necessary precautions to safeguard yourselves. Healthcare expert, we are always concerned about your health.
Coming to financial health
The board had approved the results for the period ended March 31st, 2022, I am happy to announce that the results have been healthy all parameters showing an upward trend. First of all, the results of quarter four FY2021-FY2022, the consolidated total income showed an increase of 5% against quarter four FY2020-FY2021 which stood as Rs.3805 million for Q4, FY2021- FY2020. Consolidated EBITDA for Q4, FY2021-FY2022 had showed an increase of 16% corresponding period for Q4, FY2020-FY2021 stood at Rs.1218 million for Q4 FY2021- FY2022. Now, I will present details for the full financial year FY2021-FY2022: The consolidated total income for financial year 2021-FY2022 recorded as increase of 25% at Rs.16,711 million over the FY2021, which was Rs.13401 million. Consolidated EBITDA grew by 41% from Rs.3800 million to Rs.5360 million for FY2021-FY2022 mainly due to a case mix, peer mix and cost optimization. Consolidated PAT saw an increase of 67% from Rs.2055 million to Rs.3438 million. EBITDA m
The clinical achievements during this quarter
World’s best auto-guide implantation for deep brain stimulation using artificial intelligence done by neurosurgeons at KIMS Hospital Secunderabad. Doctors at KIMS Secunderabad gave a prosthetic testis to a 23-year-old who had lost it due genetic reasons in Chelur. Complex case of tailgut is treated successfully by doctors at KIMS Hospital, Kondapur. Peripheral woman suffering from clots in legs treated without surgery at KIMS Hospital, Kondapur. Nine-months baby underwent successful liver transplant surgery at KIMS Hospital at Secunderabad. A five- year-old girl with a large coronary cameral fistula a rare congenital problem was successfully treatment at KIMS ICON Vizag. A 42-year-old gave birth to preterm baby successfully at KIMS Saveera, Anantapur. A 10-months baby successfully underwent a complex kidney surgery at KIMS Saveera, Anantapur. Complex case of pituitary tumor treated successfully at KIMS ICON, Vizag. Critical position of left main bifurcation was successfully done throug
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