Krishna Institute of Medical Sciences Ltd. is targeting an 18–20% growth in the next financial year, driven by the launch of new hospitals, and operations and maintenance contracts.
KIMS will be opening three to four hospitals in the current fiscal, followed by another three through O&M contracts in the next fiscal, Chairperson Bhaskar Rao told NDTV Profit. "We are targeting an 18–20% growth and are confident about achieving it."
An O&M contract involves outsourcing the hospital's day-to-day operations and maintenance to a third-party service provider.
"We are having almost three–four hospitals coming up in this financial year. We don't have the bandwidth of financial leverage to lose if any opportunities come up," the managing director said while detailing the expansion plans.
"Any inorganic things to take should coincide with our habits and culture of the people, governance and everything. Instead of losing new opportunities, we are talking about an opportunity in operation and management contracts," he added.
The CMD highlighted that KIMS is open to acquiring new hospitals under the O&M contracts if there is a right opportunity.
"We are also putting a call option that we should be able to buy out the asset with a certain multiple which we mutually agreed at that time. That is the reason," he explained about relying on the O&M contracts for expansion. "It looks like a great opportunity for us, where we understand that area, we also see how we can improve, putting the right people for the right talent, with all those things I think this is a better model."
However, the focus will remain on bringing in turnaround for these new hospitals handled by KIMS, he emphasised.
The healthcare company has already entered into three O&M contracts in the current fiscal — one hospital in Sangli, Maharashtra, and two in Guntur, Andhra Pradesh.
"Guntur hospital started operations two months ago. One more is going to start in the next couple of months, and one contract is with Splendid Hospital in Hyderabad," Rao said. "Another three hospitals we are starting— two in Bengaluru and one in Thane in the next one or two quarters."
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