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Prabhudas Lilladher Gives Buy Rating To This Stock For Strong 28% Upside
Brokerage firm Prabhudas Liladhar has given a buy rating to the stock of Krishna Institute of Medical Sciences Ltd. also known as KIMS IN with a potential gain of 28% in its latest report.
Brokerage firm Prabhudas Liladhar has given a buy rating to the stock of Krishna Institute of Medical Sciences Ltd. also known as KIMS IN with a potential gain of 28% in its latest report. The brokerage firm revealed that the management of KIMS indicated that it will continue to grow at double digit. In near term Sunshine acquisition will aid growth. Additionally, KIMS seeks to create cluster based investment approach in Karnataka and Maharashtra region.
1. Stock outlook
The current market price of Krishna Institute of Medical Sciences Ltd. is Rs 1236.75 with a loss of 1.88. The stock's 52-week high was Rs 1565 apiece and 52-week low was Rs 825 apiece, respectively. The P/E of KIMS IN is 35.56 which is relatively lesser than the sector P/E of 57.16. The EPS is 34.78.
The stock has given a positive return of 24% in one year and again positive return of 24% percent in 5 years. The brokerage firm has given a buy call to the stock of KIMS IN for a potential gain of 28%. The broker has suggested investors to buy the stock at current market price for a target price of Rs 1600 apiece.
| Current Market Price (CMP) | Target Price | Gain |
|---|---|---|
| 1236 | 1600 | 28% |
2. Krishna Institute of Medical Sciences Ltd.'s performance
According to the broker, KIMS is going to generate nearly Rs8-10 billion of operating cash flow over FY22-24 which will be used for setting up new units across Maharashtra and Karnataka region. The company's EBITDA has surged at 40% CAGR (compound annual growth rate) over FY18-22. Our FY23E & FY24E EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) stands marginally cut by 1-3%. We expect 20% EBIDTA CAGR over FY22-24E.
KIMS intends to create cluster based investment approach in Karnataka and Maharashtra region. KIMS have lean cost structure and given it is partnering with local doctors outside AP & Telangana region, management remains confident of achieving faster break even and +25% OPM across these new clusters over next 4-5 years.
3. Sunshine acquisition to push growth
According to Prabhudas Lilladher, Sunshine acquisition to drive growth: KIMS recently acquired 51.07% stake in Sunshine Hospitals (600 bed capacity) at a total EV of Rs. 7.3bn, at 9.7x FY21 EV/EBITDA. Sunshine's current occupancy stands at 45% with approximately 70% of revenue comes from Ortho + Cardiac specialty. The objective of KIMS is to scale up other specialties which would aid occupancy.
Further there will be synergies in consumables procurement and HR cost. The acquisition was done in Oct 2021- For Nov- March 2021, Sunshine has reported Rs. 1.9bn of revenues. KIMS is evaluating to buy land parcel along with building for Rs. 2.8bn near its flagship hospital to move its existing Sunshine unit in Begumpet which was running on lease at 7% of sales (rental exps).
Sunshine revenues to grow to Rs. 5.2bn and EBIDTA of Rs. 1.2bn by FY24E.
4. About Krishna Institute of Medical Sciences Ltd.
It came into existence on July 26, 1973 in Mumbai as Jagjit Singh and Sons Private Limited, as a private limited company. Later on it changed its address of its registered office from Maharashtra to Andhra Pradesh on February 21, 2003.
The company changed its name in 2004 to Krishna Institute of Medical Sciences Ltd. The market capitalization of the company is Rs 9897 crore.
Disclaimer
The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.
