KIMS margin recovery stalls below peers as costs outpace revenue growth
Sequential momentum improved, but higher interest, depreciation and tax reduced the benefit of 39.94% year-on-year revenue growth.
Filed 04 Nov 2026, 18:43 IST · after market close · Krishna Institute of Medical Sciences Ltd (KIMS)
Key takeaways
- Revenue growth of +39.94% lagged expense growth of +43.27% year on year, narrowing operating margin by 1.87 percentage points.
- Net profit rose only +3.61% year on year as interest increased +45.56%, depreciation rose +82.60% and the tax rate increased 3.67 percentage points.
- Operating margin improved 0.42 percentage points sequentially to 19.36%, but remained 2.04 percentage points below the 21.40% Healthcare peer median.
Price around the results
Revenue growth did not fully convert into profit
Consolidated revenue increased +39.94% year on year, but expenses grew faster at +43.27%, cutting operating margin by 1.87 percentage points. Operating profit therefore rose +27.60%, well below revenue growth. Net profit increased only +3.61% as interest rose +45.56%, depreciation rose +82.60% and the tax rate moved up 3.67 percentage points.
Sequential margin improvement came with lower financing costs
Revenue grew +13.98% sequentially while expenses increased +13.39%, allowing operating margin to improve by 0.42 percentage points. Interest expense fell -21.46% and the tax rate declined 4.63 percentage points, supporting the sequential increase in net profit of +99.47%. Other income accounted for 29.76% of profit before tax, so reported profit also contained a meaningful non-operating contribution.
Margin remains below the Healthcare peer median
Operating margin declined each quarter from 22.10% in Q1FY26 to 19.22% in Q4FY26, before edging up to 19.36% in Q2FY27. The company remains below the 21.40% median operating margin of 67 Healthcare peers that have reported the quarter, by 2.04 percentage points. The sequential recovery has therefore not yet reversed the year-on-year margin contraction.
Expansion and new clinical services remain central to the plan
Management said it is pursuing regional market leadership through expansion in target geographies and faster new-business growth. The company said its Secunderabad unit has 1,000 beds, with 250 under construction. Management also said it launched metabolic, neuro-equilibrium and oncology services in North Maharashtra, alongside kidney-transplant initiatives and more than 900 surgeries at an O&M unit.
No immediate market reaction after the post-close filing
The consolidated results were filed after market close, so there was no reported market reaction yet. Across the stock's last eight results reactions, moves were evenly split between four increases and four declines, with a median absolute move of 1.81%. The last six recorded moves ranged from -5.88% to +8.65%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,344 cr | ₹1,180 cr | +13.98% | +39.94% |
| Other income | ₹31 cr | ₹17 cr | +80.46% | +705.13% |
| Expenses | ₹1,084 cr | ₹956 cr | +13.39% | +43.27% |
| Operating profit | ₹260 cr | ₹223 cr | +16.52% | +27.60% |
| Operating margin (%) | 19.36% | 18.94% | — | — |
| Interest | ₹66 cr | ₹83 cr | -21.46% | +45.56% |
| Depreciation | ₹121 cr | ₹101 cr | +19.74% | +82.60% |
| Profit before tax | ₹106 cr | ₹57 cr | +86.40% | +8.99% |
| Tax | ₹31 cr | ₹19 cr | +60.94% | +24.60% |
| Net profit | ₹75 cr | ₹37 cr | +99.47% | +3.61% |
| EPS (₹) | ₹1.79 | ₹1.04 | +72.12% | +7.19% |
Operating margin of 19.36% compares with a Healthcare sector median of 21.40% across 67 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company performed North Maharashtra's first swap kidney transplant.
- The company completed a live robotic and cadaveric kidney transplant, including the first international ABO-incompatible robotic kidney transplant.
- The company performed more than 900 surgeries across all specialties at an O&M unit.
- The company completed seven or more liver and kidney transplants at an O&M unit.
Guidance & outlook
- The company is focused on regional market leadership through expansion in target geographies and accelerating new business growth.
Expansion
- The company says its Secunderabad unit has 1,000 beds, with 250 beds under construction.
New initiatives
- The company launched the Fat to Fit Metabolic Clinic as the first of its kind in North Maharashtra.
- The company launched Neuro Equilibrium services, becoming the second centre in North Maharashtra.
- The company launched oncology services at an O&M unit, expanding its clinical portfolio.
What to watch
- Whether operating margin holds above 19.36% after the sequential recovery.
- Whether interest expense stays below Rs 65.5 cr as expansion continues.
- Progress on the 250 beds under construction at the Secunderabad unit.