Krishna Institute of Medical Sciences Limited
8,991words
134turns
0analyst exchanges
4executives
Management on call
Bhaskara Rao Bollineni
FOUNDER AND MANAGING DIRECTOR
Abhinay Bollineni
EXECUTIVE DIRECTOR AND CHIEF EXECUTIVE OFFICER
Vikas Maheshwari
CFO
Rahul Jeewani
IIFL SECURITIES LIMITED
Key numbers — 40 extracted
33%
Rs.4955 million
9%
Rs. 1312 million
26.5%
17.8%
Rs. 1961 million
21.7%
19.9%
8.5%
20.1%
rs,
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Guidance — 20 items
Rahul Jeewani
opening
“In the coming quarters as the indication gathers further steam coupled with revenue growth and rationalization of cost, we expect the acquisition to give much better results.”
Rahul Jeewani
opening
“We all know that the first quarter we do not increase every year the price hikes for the patients that is why because of the employment expenditure will bring down but it will be able to shut down in the coming three quarters.”
Rahul Jeewani
opening
“1961 million which will be deployed for ongoing and upcoming projects.”
Rahul Jeewani
opening
“Even after the acquisition, of Sunshine Hospitals, the company remained net cash positive which will be deployed for further growth in the company.”
Chintan Seth
opening
“If you can highlight, how should we expect, what will be the trajectory of ARPOB given the mix will move down to normalization with lower cash and increase in schemes and Arogya scheme patients in the ensuing quarter, that is second and third is on the pledge share if you can provide some color on when should them to, because from December quarter to June there is an increase over there.”
Chintan Seth
opening
“So, if you can throw some light how should we look at it going forward.”
Chintan Seth
opening
“So how should we look at ARPP and ARPOB going forward because you are saying electives were lower.”
Chintan Seth
opening
“So I am just trying to understand that how should we read ARPOB going forward.”
Chintan Seth
opening
“So that mix we are targeting to maintain going forward.”
Mr. Vikas Maheshwari
opening
“80% cash and insurance, we should be able to maintain +/-1% because that we cannot predict and Corporate and Aarogyasri should continue to be at around 19%-20% going forward.”
Risks & concerns — 9 flagged
The slight decline in EBITDA margin is due to the consolidation of Sunshine Hospitals which is operating at 17.8% EBITDA margin had also increased cost for employees, doctors and power and fuel cost at existing KIMS Hospitals.
— Rahul Jeewani
It seems that the occupancy on the total bed capacity has both sequentially as well as on a year-on-year basis has soften a bit.
— Chintan Seth
As far the Secunderabad hospital is concern we are likely to move to into the campus by end of the year or early part of quarter 4 and once that happens, we will then induct lot more clinical talent which will then reduce the dependency on orthopedics and make it a more multispecialty hospital.
— Dr. Abhinay Bollineni
So that is one kicker which we are seeing and we have the given the indication that the Sunshine is a great appreciation, our great potentials to grow and we can develop the EBITDA from here in the next 18-24 months’ time, So that is the great potential as far as the KIMS is concern this quarter particularly for the Telangana market the EBITDA got little bit impacted because of the increments to the doctors and other employees, non-medical employees etc.
— Mr. Vikas Maheshwari
Post 18 months from now when the two new hospitals come onboard obviously their occupancy will ramp up over a period of time but the cost will kick in right away would that put some pressure on margins it might be trajectory but I am simply trying to understand would there be some pressure on margins because of them.
— Gagan Thareja
As far as ROC is concern consent SUNSHINE integration has been completely done with us and this the large amount of the goodwill which has come into along with this excluding goodwill which shows the underlying business ROC which is getting deployed (Inaudible) 54:34 27% and based on the capital employed if take it in the goodwill it is at around 22%-23%.
— Mr. Vikas Maheshwari
And sir going forward do not we see slowdown in cash flow from operations because already we will be deploying money for couple of acquisitions and acquisitions are at lower margins, so cash flow generation will it slowdown going forward because right now KIMS standalone is generating 30% margins your cash flows are also accordingly getting generated and then you have Sunshine which is at 18%, so proportionately will it reduce going forward, was my question audible or should I repeat it?
— Bhavya Gandhi
Sir going forward will we see slowdown in cash flow from operations because our standalone KIMS was at 30% margin and your cash flows are resultant of margin and Sunshine coming at 18% and we have already planned for 18 months of capex, so post that will there be a slowdown?
— Bhavya Gandhi
Sir just one last question if we look KIMS as a standalone business, we see revenue growth of either 2% to 3% on sequential basis, any reason like what has led to the slowdown in revenue growth?
— Bhavya Gandhi
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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 First Quarter Earnings Conference Call of KIMS Hospital hosted by IIFL. I thank the KIMS management team for giving us the opportunity to host this call today from KIMS we have us Dr. Bhaskara 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. Bhaskara Rao Bollineni: Good morning and a warm welcome to our dear investors. The nation is celebrating Azadi Ka Amrit Mahotsav and we are just 100 hours aways from the land mark 75th anniversary of our Independence. As such the country is gripped in the state of patriotic fervor, I share with you the elevated mood of the nation on this great occasion and extent you a healthy welcome to this investor’s meeting. It gives me great pleasure to appraise you the financial results of quarter 1 for the financial year 2022- 2023. As you
Rahul Jeewani
Thank you very much. We will now begin the question-and-answer session. The first question is from the line Chintan Seth from Sameeksha Capital. Please go ahead.
Chintan Seth
Sir, two sets of questions, one is related to the quarter, if I look at your IP volumes. It seems that the occupancy on the total bed capacity has both sequentially as well as on a year-on-year basis has soften a bit. Is this related to seasonality and second is on the ARPOB side, given the base quarter had COVID patients into the IP volume this ARPOB seems to still continue to grow on that based on a year-on-year basis. If you can highlight, how should we expect, what will be the trajectory of ARPOB given the mix will move down to normalization with lower cash and increase in schemes and Arogya scheme patients in the ensuing quarter, that is second and third is on the pledge share if you can provide some color on when should them to, because from December quarter to June there is an increase over there. So, if you can throw some light how should we look at it going forward. That are the three questions.
Dr. Abhinay Bollineni
Dr. Abhinay speaking, so on your first point, we had seen a very dull first month of the quarter. So, April and part of May was unusually lower than what we had expected it to be. Honestly, we have done some work across the country to understand why this pattern is been there but were not able to figure out why and anyways thankfully mid of May and June-July have been continuing to do quite well. We believe that there is a one-time lull on the market either the overall hangover after COVID and people wanted to take a break from a left procedures and all of that because of which we have seen a dip in volume both in April and mid of May which resulted in lower occupancy and as the law and elective works stopped coming down there has been some impact on the ARPOB but the month of May, June, July and even in the month of August, things are completely back on track as per budget.
Mr. Vikas Maheshwari
So, to add to what Dr, Abhinay has told if you look at our ALOS have slightly improved. Those are ARPP has increased, so we have improved our ALOS from 4.6 in the March quarter to 4.3. So that has also resulted into the lower occupancy but the revenue though as Dr. Abhinay has told the April and part of the May was little dull. We could have been able to match up the revenue and occupancy slightly got impacted because of the ALOS also improved. So, able to improve both ARPOB and ARPP both year-on-year basis and quarter-on-quarter basis.
Chintan Seth
So how should we look at ARPP and ARPOB going forward because you are saying electives were lower. I presume there were no COVID patients in this quarter and cash mix. It seems sequentially there is little change assuming slightly lower 57.5 in Q4 2022 versus 54.7% but insurance has increased from 17.5 to 24. So given the mix is slightly lower in the cash segment. Still our ARPOB and ARPP has improved. So I am just trying to understand that how should we read ARPOB going forward.
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