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Investment Rationale

A. Expansion & Cluster-Based Growth Model Driving Scale

* KIMS has built a dominant presence in South India, with offering more than 40 multi-specialties services (~5,000 beds operational) following a hub-and-spoke cluster model. The company’s asset-light approach—favoring brownfield expansions, lease-based additions, and selective acquisitions— continues to deliver capital-efficient growth. Its focus on operational excellence, regional depth, and affordability differentiates it from peers in the tertiary care segment.

B. Accelerated Expansion Nearing Completion

* Over the past two to three years, KIMS has undertaken an aggressive and well-calibrated expansion program, combining organic, inorganic, and asset-light initiatives across both existing and new regions. The company is in the final phase of this investment cycle, with plans to add ~1,800 beds over the next 12 months, largely in H2FY26E. This expansion includes brownfield additions in Telangana and Andhra Pradesh and greenfield/leased facilities in new geographies such as Karnataka, Maharashtra, and Odisha.

C. Regional Leadership and Scalable Model

* KIMS commands strong brand equity in Telangana and Andhra Pradesh, with growing visibility in Karnataka and Maharashtra.

* Its replicable cluster strategy anchored by regional hubs and peripheral spokes offers operational synergies, improved doctor utilization, and steady occupancy ramp-up in new hospitals

Outlook & Valuation

* KIMS is well-positioned for sustained growth, supported by strategic expansions, a favorable case mix, and rising ARPOB. Although occupancy has seen a temporary dip, the company’s emphasis on high-value specialties, operational efficiencies, and regional expansion is expected to underpin long-term profitability.

* KIMS Currently trading at 33x/25x EV/EBITDA for FY26E/FY27E

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