Hospital chain with an industry-high operating margin of 30%
π₯ πππ π¦
A thread on why we do not recommend the stock ‡οΈ
π₯ πππ π¦
A thread on why we do not recommend the stock ‡οΈ
Krishna Institute of Medical Sciences (KIMS) is a multispeciality hospital chain dealing in cardiology, oncology, neurology, etc.
#business #sonacoms
#business #sonacoms
π₯ Industry overview -
17-18% strong CAGR growth is expected from the industry due to:
β’ Increasing life expectancy
β’ Rise in lifestyle diseases
β’ Govt's increasing healthcare expenditure
17-18% strong CAGR growth is expected from the industry due to:
β’ Increasing life expectancy
β’ Rise in lifestyle diseases
β’ Govt's increasing healthcare expenditure
Strengths of KIMS -
β’ High EBITDA margin due to speciality services like neuro, transplants, etc
β’ Also due to less rental costs in perpetual leased buildings
β’ Healthy client mix: 78% rev. from retail & insurance, only 8% from govt.
β’ High EBITDA margin due to speciality services like neuro, transplants, etc
β’ Also due to less rental costs in perpetual leased buildings
β’ Healthy client mix: 78% rev. from retail & insurance, only 8% from govt.
Weaknesses of KIMS -
β’ Avg. revenue per occupied bed is low due to affordable pricing
β’ High concentration in Telengana & AP
β’ 1000 Cr capex plans in next 4-5yrs to affect profits
β’ Acquisition of 2 low-margin hospitals to affect operating margins
Impact already visible ‡οΈ
β’ Avg. revenue per occupied bed is low due to affordable pricing
β’ High concentration in Telengana & AP
β’ 1000 Cr capex plans in next 4-5yrs to affect profits
β’ Acquisition of 2 low-margin hospitals to affect operating margins
Impact already visible ‡οΈ
KIMS' report card by Recipe -
β Quality business model
β Ethical management
β Robust financials
β Strong growth prospects
β Reasonable valuations
β Adequate safety net
#Stocks #Investment
β Quality business model
β Ethical management
β Robust financials
β Strong growth prospects
β Reasonable valuations
β Adequate safety net
#Stocks #Investment
Our take:
As discussed above, the company seems good due to its strong growth prospects and high margins.
But hospitals' profitability remain subdued during the capex phase. Hence, we do not recommend investing in KIMS now.
As discussed above, the company seems good due to its strong growth prospects and high margins.
But hospitals' profitability remain subdued during the capex phase. Hence, we do not recommend investing in KIMS now.
KIMS scored 83% in Recipe's scorecard. But we require a score of 90-100% to recommend a stock.
β‘οΈ View our recommendations now at Recipe.finology.in/stock-and-mutuβ¦
β‘οΈ View our recommendations now at Recipe.finology.in/stock-and-mutuβ¦
β’ β’ β’
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