Krishna Institute of Medical Sciences or KIMS Hospitals will be in focus heading on Tuesday after the company received a favourable note from Kotak Securities, which not only upgraded its stance but also issued a significant hike in target price, citing the brand’s strong fundamentals.
In its latest note, the brokerage firm pointed out KIMS Hospitals’ scaling-up efforts across markets and the third-quarter earnings, where the company registered revenue of around Rs 1,000 crore.
KIMS Q3 Highlights (Consolidated, YoY)
- Revenue up 29.2% at Rs 998 crore versus Rs 772 crore.
- EBITDA up 6.3% at Rs 199 crore versus Rs 187 crore.
- EBITDA margin at 19.9% versus 24.2%.
- Net profit down 39.8% at Rs 53.4 crore versus Rs 88.7 crore.
Kotak Securities adds that lower losses at new hospitals and an uptick in Telangana were crucial factors in helping KIMS beat estimates in the third-quarter.
There are also encouraging progress in new units, with the company on track to meet its breakeven efforts. All of these factors have contributed to Kotak offering a more positive view on KIMS going forward.
While there are some concerns over execution, Kotak Securities believes those concerns have been priced in, thanks to the recent stock price correction. Shares of KIMS have fallen more than 10% in the last six months. It had fallen by a higher margin, but the stock was able to claw back much of the losses thanks to a 9% surge in trade on Monday.
Overall, Kotak Securities has upgraded its stance on KIMS Hospitals from ‘reduce’ to ‘add’ while hiking the target price from Rs 660 to Rs 715, which implies an upside of around 10% from Monday’s closing price of Rs 649.
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