Gujarat Kidney And Super Speciality Limited (GKSL) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Gujarat Kidney and Super Specialty Ltd. Q2 F527 Earnings Conference Call hosted by Q&A Advisors LLP. As a reminder, all participant lines will be in the lesson-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference, Otamath Soumya Chajid from Grow India Advisors LLP. Thank you, and over to you now.

Good day, everyone, and welcome to Q2 and H1 FY27 Earnings Conference Call of Gujarat Kidney and Super Specialties Limited. We have on call with us Mr. Pragmesh, Promoter and Managing Director, Ms. Bhavika, the Chief Financial Officer, and Mr. Nazir, Consulting CA. We must remind you that discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risk pertaining to the business. I now request the management to take us through the same and provide some insight on the quarter gone by. Post that, we will open the floor for JNN. Thank you and over to you, sir.

Yes, good morning to everyone. Myself, Dr. Fredness Varkoda, Chairman and Managing Director for Gujarat Kidney and Superspeciality Limited. In future, in this perspective, we will call as a GKSL. Very good afternoon to everyone. It gives me a great pleasure to welcome our shareholders, investors, analysts, and the stakeholders to our first earning call as a listed company. On behalf of the entire GKSL team, thank you for your trust and support. It has saved this journey and we look forward to a transparent and regular dialogue with you. Our journey began in 2014 with Gujarat Kidney Hospital in Varodhana, a single speciality center focused on renal care. Over the past decade, we have built the business on the three things, deep clinical specialization, disciplined capacity, expansion, and selective acquisitions of a well-established hospital. Today, we are operating in 11 hospitals with 10 pharmacies in 9 cities. Ah, that gives us a clinical bench and physical capacity to serve the patients across the full care content from the outpatient consultation to the complex surgery. Our core strength remains renal science and urology at our main center, that is the Budhrat Kidney Hospital. Our capabilities We have expanded endo-urology, urologic oncology, pediatric and reconstructive urology, renal transplant, and laparoscopic urology. These are the high-quired and high-skilled procedures, hence they incur our reputations and referral flow. Building on this base, we have expanded into cardiology, oncology, orthopedic, OBGY, and general surgery. This has broadened our patient's base, improved our case mix, and reduced our dependency on any single speciality. Our business is an asset-like model, acquisitions lead model, combined leased facility with controlling stakes in established hospitals. It leads us to enter a new market faster and with lower upfront capital than a purely greenfield approach. And we acquire hospitals that already have a patient base and clinical credibility. We keep the clinical protocols, operating discipline, and specialty focus that define GKSL. So each addition transcends the network instead of simply adding the base. Coming to the results, this model has delivered a strong growth. Consolated revenue rise from 40.2 crore in FY25 to 80.0 crore in FY26, up to 104% year-on-year. EBITDA reached Our EBITDA margin of 32.8 was the best among our listed peers against an average of approximately 24.3%. Take margins to a 20.05. This reflects our specialty list, case mix, and our cost discipline method. In FY26, average bed occupancy was approximately 65% and average revenue per occupied bed was approximately 9,221 per day. Occupancy at 65% means we still have a meaningful bedroom to grow within our existing capacity, which is a lever on revenue and margin as the network matures. In H1 F527, consolidated revenues from operations 2 at 72.4 crore up to 157% stage year-on-year from 28.2 crore in H1 F26. In just 6 months, that is already 88% of our full year 26 revenue. And invite a voice. 18.6 crore up to 35% year-on-year with an EBITDA margin of approximately 25.7 and PET was 11.9 crore up to 44% year-on-year and PET margin of approximately 16.5%. In quarter 2, FY27 shows the momentum building. Revenue was 38.1 crore up to 11% quarter-on-quarter and 195% year-on-year. EBITDA grew 22% quarter on quarter to 10.2 crore and our EBITDA margin expanding to 26.8 from 24.4% in quarter 1. Its revenue grew faster than our operating cost. Paid was 6.6 crores, up to 24% is quarter of quarter, and 129% is year only. Compared to the last year, margin reflects the consolidations of the hospital we acquired during 26, which we are now upgrading. Subsequently, they are moving in the right direction. Our balance sheet gives us the room to keep executing. As of 30th September 2026, our net worth stood at 263.6 crores and VR net cash with cash and bank balance of 32.2 crores against borrowing of 17.3 crores. During the half, we deployed approximately 16.7 crores towards acquisition and 6.2 crores in capital expenditure while operating cash flow turned positive. Now, going forward, we are focused on three priorities. First, upgrading to our existing hospital that already we have done and we are doing and which is also under pipeline. Second, pursuing the selective inorganic opportunities that also we are doing. And third, capturing a larger scale of a patient journey. This means OPD and diagnostic, IPD and ICU, surgery, pharmacies, and follow-up. Retaining the patients across these touch points improves utilization, depends engagement, and support revenue for patients. We acquired an international opportunity like in Dubai. Another important opportunity is Dubai where we have acquired a 51% stake in established polyclinic with an existing revenue base of approximately 20 crore. It gives us access to international patients and create a potential medical tourism gateway where the patient can be referred into our specialized network in India. The remaining 49% also we are in discussion. As we move forward, our focus remains on improving utilization, strengthening speciality capabilities, enhancing case mix, integrated acquisition, and maintaining discipline capital allocation. We believe GKSL is well positioned to build a larger, integrated, specialized lead healthcare platform while continuing to deliver quality, affordable, and patient-centric care. Thank you once again for joining us. I will now be happy to take your questions. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and 1 on the question on the telephone.

If you wish to remove yourself from the question queue, you may press star and 2.

Participants are requested to use handsets while asking a question. Ladies and gentlemen, We will wait for a moment while the question queue assembles.

Participants, you must press star and 1 to ask the question. First question is from the land of Gagandhi Singh, from Doon Funds.

Please, go ahead.

I am not getting the voice, Mr. Gagandhi. Yes, sir. I am audible. Yeah, you are audible, and you are speaking from behalf of Hong Kong. Can you introduce yourself, please?

Definitely, sir.

So, I am an investor, and I am also looking into a fund that is called Doon Funds. It is based out of Beradu, that is in Uttarakhand. So, my question is on your RPOP. So, your RPOP is relatively very low, like if you compare it with the major hospitals. So, what are your plans to increase the RPOP?

Average Revenue or Occupy Bay In consolidated, it is like 9,000 to 21 per day. So, basically, if we are going for the standalone, and if we can see about on the standalone, it is comparatively okay. But once we are acquiring the another hospital, so now consolidated, it looks like this thing. Second thing, sir, the margin as such, it is decreasing day by day into the government scheme. And though we are not catering them, it is only two percentage, but definitely we are also having an internal committee and we are thinking how to process and how to increase the ARCO in a coming quarter and we will make one strategic plan over it.

Okay, sir. That's good to hear. Sir, my second question is on the operating margin. So, what operating margin can you guide us for the FY27N for the next upcoming years?

Exactly. About on the operating margins, I will give you one example. I mean, always we are very concerned about our expenses. So, you know, the labor law is also there. So, we are not cutting down the cost over the nursing staffs and all. But where we are doing the consumption and discounting only over the expensive sites, like the doctor incentives and doctor salaries, and we are putting the model over the full-time model doctors. So there we are having the high margin from the operating cost, number one. Number two, we are concentrating only over the football of the patients. If the direct patient comes, then of course the margin will be much more amount of higher than the referral margins like coming from the insurance sites, from the TPSI. Then we have to give the discounts to the insurance sector. It's a policy law. But if the direct case patient, if we are targeting, then the margin will increase day by day. And we are on it and our margin is also increasing if you will see our history.

Yes. Sir, can you give any guidance on that? Like what improvement can we see on the basis point level?

We have to see the case specials, number one. Number two, we have to see the expenses. Number three, we have to hire the full-time reputed doctors on our board. Number four, we have to see the quality staff. And number 5, always we have to see the other hospital, whatever we have acquired, there we have to take care about in the management part, there the leakages should not be there. In this way, we can increase our margin first.

So, if I can just push you on this, so can I say that going forward, the trajectory of the margin would be upwards from where we are currently?

Margin, see, average margin will be there on the same, but quarter on quarter, it may be fluctuated or it may differ. But at the end of a year, it remains denser. Sometimes it may give a hit if we take the loan and if we do acquisition recently. It can give the effects to the end of the year. But we are trying to save our all the margins, all the expenses and give the good and better results. Thank you. Actually, in this aspect, with A1 hospital, we have an internal auditor call, and the day-to-day, they are generating the reports that say, where is the leakage, where is the difference of the, sometimes the hospital is being the leakage, the subsidiary is not giving the leakage. So, exactly the internal auditor reports are very useful here.

Got it, sir. Thank you so much for taking my question. Congratulations on amazing set of numbers, and happy Diwali to you.

Thank you. I think you are coming from the hospital side. Have you invested somewhere else in hospitals? Yes, sir.

I am invested in other hospital stocks as well.

Because the questions are very specific. It is just like that some management people from the hospital side will ask. Thank you. Thanks a lot.

Thank you very much.

Paracelman, Jim F.S.R.N. want to ask a question. Next question is from Lano Vedant Radhi. From Blue, please go ahead.

Yes, thank you. Thank you very much. Sir, congratulations on the good side of numbers. I think from, you know, I think, you know, these numbers are quite strong and healthy. Just wanted to ask from our acquisition pipeline more into a few. I think we'd like to understand what kind of a CAPEX strategy have you guys forecasted for this particular year for H2 onwards. For in the lines of acquisition, are we also expanding beyond Gujarat, or are we going to stick to Gujarat for the foreseeable future? That's my first question.

Your question is very specific. I would like to give the answers. First, we have acquired 51% of our... We have 51% of our subsidiaries. So first focus is there that if we can have much more amount of a stake into our subsidiary, then it is our first priority. Like in Blue Tree in Dubai, that hospital is doing well. Valuation has been already decided. So first we are looking over it after giving one or two quarter results from there. Once they will prove themselves according to their commitment, then first we would like to acquire their stake itself. Number two, I forget your question. What was the number two?

Any future acquisitions?

Number two, you asked me about the acquisition or the greenfield project in Gujarat, in central Gujarat or outside where we are looking after all of it. There are specific criteria that if we do the acquisition and the hospital has to be run by the doctors, minimum 15 years history has to be there. Always the doctors have the good reputation. The doctors should not have any litigations over the hospitals and over the doctor's side. And they have to give the commitment to us for at least seven years. So, if we are finding such kind of a deal inside the Gujarat or outside the Gujarat, then the preference will go towards that side than the greenfield project. Of course, we have in the pipeline about on the two greenfield projects that is the expansion of the Andavad hospital as well as to the Baruj hospital that already we are planning and we are doing so.

Understood. Thank you, sir. So, my second question here would be, for the full year, what kind of guidance do you can give us with respect to margins and revenue, given the high baseline that we have already achieved for this FY27 or H1?

It is a history, means if you will see the past results of the quarter and quarter two, you can make out over it, sir.

Understood. And lastly, how much of a steady-state occupancy do we expect with our ALOS as well? If we are planning to introduce more complex therapies within NefroCare, do you think that our ALOS and our overall ARPOP should increase with basis of these complex therapies or the current boutique or services are enough to cater to the same?

See, the margin will increase once we increase the super speciality work. There the margins are good. If you are comparing with the nephroplus, this nephroplus are doing only the dialysis. And we have the dialysis sensor in-house of our hospitals. And the margins are very less into this dialysis business. Number two, the super speciality work like nephro-eurosides. About on the complex surgery, on the cardiac side, major procedure, that gives the good margin. Third, if in every quarter, the revenue... And the profit will not be a constant. Again and again, I am emphasizing these words in the hospital industry. The patients will come. In some healthy seasons, patients will be late. In the festival season, patients will be late. It is not like that we are running any industry, steel industries or plastic industry. The festivals will give the effects. The doctors leave will give such kind of effects. So the defect will come. But at the end of a year, if you will see, the average will come down to the same as what the quarter two speaks. But the quarter one will be high, quarter two will be less, quarter three will fluctuate. But averagely, the year on year, if you will see, the expansion and the results. If on a consolidated basis, and if we are going on an acquisition, it gives the best strengthening towards the balance sheet side.

I understand. Okay.

Thank you, Scott, and all the best.

Thank you. Thank you. Participants, you may press star and want to ask a question. Next question is from Lainov, Devin Maglani. From Binance Financial Services, please go ahead.

Hello.

Yes, tell me, sir.

Can you speak a little louder, please? Hello.

Hello.

Yeah, I'm listening. Please, please, please proceed. I'm listening.

Yeah.

Yeah.

So, sir, my first question is, so I wanted to ask that, has the payer made change for us? So, I see that a lot of receivables are accumulating. I guess we have 40, 42 crores of receivables. So, now are the customers paying or are the majority of the payments are coming from the insurance side?

Sir, are you sitting with someone else because you are not speaking loudly. Can you speak loudly to get your query correctly? So I can also just speak over it. Hello. Hello, hello.

The problem is there is a bit of background noise, so it's unclear when you are talking. Can you move to a different location, please? Hello.

Is it clear now? Hello? Is it clear now?

Yes, go ahead.

Sir, I wanted to ask that the details have been continuously and a lot of receivables have been accumulated in the balance sheet. So has the techniques changed? So now the insurance companies are paying more for the customers or are the customers are paying for themselves?

Your question is that the receivables are on a higher side, number one. Yes, yes, yes. One minute. The receivables were on a higher side, but from the 1st April, we are very strict over it, and there is no pendency for more than 102 or 115 days. Before that, all the subsidiaries, or even in the standalone hospital side, We are very liberal and we are doing the work as per the patient's wish and we are giving the discount also. But from the 1st April, if you will see, the receivable are less. These receivables are accumulated receivables, not the recent one receivables, and yes, recoveries are going on, sir.

Okay, okay, got it. Sir, I feel most of them are accumulated ones, and maybe we'll receive them from insurance companies.

Yes, definitely. See, nowadays, the governments are also paying after six months and sometimes the queries are there in all the hospitals around. I mean, if we are not taking tasks in time, in some cases are going into the query sites and after one query they will generate, then they will take much more amount of time. Patients are coming from the corporation side, patients are coming from the government scheme side, such kind of a patient. We are treating and we are giving the discharge. So, there is a process to submit the bill. After the submitting of the bill, they will generate the query. And if you will miss the portal and if you will miss the query reply, then they will hold that amount of money. Then again, we have to go to the center in person. So, such exercise we have to be supposed to do it. And the same way now the insurance companies have started into this case where it is even. So, pendency will be there. But of course, that payments are on track. It is coming. But yes, of course, your question is right. And we are also following over it.

Okay, okay. Got it, sir. Got it. Secondly, the BlueTree acquisition that we did in Dubai. So, how is it related to the super-speciality business that we are currently doing? So, any specific rationale for it?

I already told you that the super-speciality business is good for the margin purposes, number one. Number two, BlueTree is a polyplenic. And this is run by Dr. Amar. And Dr. Amar is a renowned doctor there and having a good profitability since last 5 years on that basis we acquired and we are making the base for the tourism, medical tourism purposes. And there also we are earning, having a good amount of EBITDA, having a good amount of net profit. So, each and every hospital have different peculiarities. Blanketly, we are not throwing all the thoughts over one hospital.

Okay, okay, okay. Okay, sir. Thank you. That's all from my side. Okay. Thank you.

Thank you. Part 7G may press star and want to ask a question. Next question is from the line of Ria from Alpha Capital. Please, go ahead.

Hello, am I audible? Hi, thank you for this opportunity. So, I would like to ask, operating cash flow is roughly 0.4 crore in H1 and against the pattern of 11.9 crore. So, just wanted to understand where is the cash going, what is the usage?

One meter, I will also ask to my consultant added accountant, one meter.

Okay. Okay.

So, the second question... We have done the acquisition in between, sir.

Okay. Okay, got it. So, the second question I have is on the outlook. So, can you give me a rough idea on what our revenue for FY27 would look like in EBITDA margin?

This is very difficult to say on this platform. And number two, that we have to do our work, whatever we are doing, and we are delivering the results. And about on the history side, you can make out about the growth pattern. This is the only way to convey about these questions on this platform to you.

Okay, understood. And so how many acquisitions are in the pipeline and how will you find them?

A very true question, but it is in pipeline. Already I told you that as of now, we are thinking to acquire the remaining space and we are in a discussion with our existing subsidiary. And whatever the work we are doing for the acquisition, that we have not implemented to any extent. So, we cannot declare. It's our internal commitment to our hospital side. So, we cannot declare such kind of answer here.

Okay.

And we leave the NDA. We should not say that what the acquisition will be there in future about on the NAMS side. Yes, we are planning to do it.

Noted. Thank you, sir.

Thank you very much.

Next question is from the line of B.T. Agarwal from SJ Associates. Please go ahead.

Thank you so much for the opportunity. I just wanted to know that your EBITDA margins have fallen from 48% in H1FY26 to 25% in H1FY27. So is this 26% the new normal or will it go back towards 40%?

But EBITDA margin will fluctuate, but at the end, it becomes average. And why EBITDA margin is fluctuating due to the recent acquisition?

That is the only answer what we can say.

Second thing, the EBITDA, whatever you are seeing on a consolidated basis, having the average EBITDA, some hospital having the higher amount of EBITDA, where the specific super-specialty works are there, some having the mixed EBITDA, where the multi-specialty works are there, but averagely it comes to exactly what we have as of now at the end of this 2017. That is a rough idea we can give the right. We can indicate it, but ultimately the number speaks at the end of the call.

Okay, and the employee cost also jumped to 41% in quarter one from 5 crores to 7 crores. So, is the queue to the new run rate?

Employee cost is due to the again. Employee cost, I am telling that recently we acquired the blue tree clinic, that is in Dubai. So, of course, you can imagine that the employee cost is higher in Dubai. Second thing, we are also scrutinizing it where the employee cost is high. So, we are also managing that part, but of course, due to this blue tree acquisition, the heat is there into this employee cost part.

Understood, sir. Yeah, that's it from my side. Thank you so much.

Thank you very much.

Participants, you may press start and run to ask the question. Ladies and gentlemen, you must start and want to ask a question. A reminder to all the participants, you may press star and 1 to ask the question. As there are no further questions, I'll now hand the conference over to the management for closing comments. Yeah, very nice to hear from

all the stakeholders and from the investor side. Thank you. Thanks a lot. And again, we will see you once more on quarter to quarter. Thank you. Thanks a lot, sir. Thank you.

Thank you very much.

On behalf of Go India Advisors LLP, that concludes this conference. Thank you all for joining us and you may now disconnect your lines. Thank you.