Prabhudas Lilladher has given Buy recommendation for Krishna Institute of Medical Sciences with a target price of Rs. 1550 in its research report issued on Aug 13, 2022
Prabhudas Lilladher’s research report on Krishna Institute of Medical Sciences
KIMS’s robust cost control, low capital intensive set-up and value accretive acquisitions have ensured good profitability in past with EBITDA growth at 40% CAGR over FY18-22. Also, the recent acquisition of Sunshine is value accretive. This coupled with brownfield and greenfield expansion of +1500 beds over next 3-4 years will continue to aid growth momentum, in our view. We expect 18% EBITDA CAGR over FY22-24E, with best in class return ratios at 20%/30% RoE/RoCE.
KIIMS Q1 operating performance was broadly in line and we see QoQ decline in occupancy as blip and should recover from Q2. Our FY23E and FY24E EBITDA stands cut by 4% and 3%. We maintain our ‘Buy’ rating with TP of Rs1,550/share, based on 20x FY24E EV/EBITDA. At CMP, stock is trading at valuations of 15.7x EV/EBITDA (adj for IND AS and partner’s stake) and 28x P/E on FY24E.