Gujarat Kidney & Super Speciality (NSE:GKSL) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Gujarat Kidney And Super Speciality Limited q two FY twenty seven earnings conference call hosted by Coenay Advisors LLP. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Ms. Sonia Chajarat from Gujarat Kidney Advisors. You, and over to you, ma'am. Good day, everyone, and welcome to q two and h one FY twenty seven earnings conference call of Gujarat Kidney And Super Speciality Limited.

0:49 We have on call with us mister Pragmeish, promoter and managing director, miss Bhavika, the chief financial officer, and mister 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'll open the floor for Julian. Thank you, and over to you, sir. Yes. Good morning to everyone. Myself, doctor, chairman and managing director of Gujarat Kidney And Super Speciality Limited. In future, in this perspective, we will call it a GKSL. Very good good afternoon to everyone. It gives me a great pleasure to welcome our shareholders, investors, analysts, and the stakeholders to our first earning call at the listed company.

1:43 On behalf of the entire GKSL team, thank you for your trust and support. It has helped this journey, and we look forward to a transparent and regular dialogue with you. Our journey began in 2014 with Gujarat Kidney Hospital in Vadodara, a single specialty 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 nine cities. 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.

2:33 Our core strength remains renal science and urology at our main center. This is the Gujarat Kidney Hospital. Our capabilities span endourology, urologic oncology, pediatric and reconstructive urology, renal transplant, and laparoscopic urology. These are the high acquired and high skilled procedures, and and they enter our reputations and referral flow. Building on this base, we are expanding to cardiology, oncology, orthopedic, OBGYN, and general surgery. This has broadened our patient base, improved our case mix, and reduced our dependency on any single specialty. Our business is a asset like model, acquisition slate model, combined lead specialty with controlling stakes in established hospitals.

3:19 It leads us 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 coker that defined GKSL. So each addition strengthens the network instead of simply adding to base. Coming to the results, this model has delivered a strong growth. Consolidated revenue rise from 40 to 40.2 in FY twenty five to 80.0 crore in FY twenty six, up to 104% year on year. EBITDA reached approximately 27 crore and paid approximately 17 crore, growing sixty three and seventy seven percentage, respectively.

4:13 Our EBITDA margin of 32.8 was the best among our listed peers against an average of approximately 24.3 percentage. Debt margins stood at 20.05. This reflects our specialty rate case mix and our cost discipline network. In FY '26, average bed occupancy was approximately 65 percentage, and average revenue per occupied bed was approximately $9,002.21 per day. Occupancy at 65 percentage means we still have a meaningful headroom to grow within our existing capacity, which is a lever on revenue and margin as the network matures.

5:01 In h one f y twenty seven, consolidated revenues from operations stood at 72.4 crore up to one fifty seven percentage year on year from 28.2 crore in h y f twenty six. In just six months, that is already 88 percentage of our full year '26 revenue. EBITDA was 18.6 crore up to 35% year on year with an EBITDA margin of approximately 25.7, and PAT was 11.9 crore up to 44 percentage year on year and PAT margin of approximately 16.5 percentage. In quarter two, FY twenty seven shows the momentum building. Revenue was 38.1 crore, up to 11 percentage quarter on quarter and one ninety five percentage year on year.

5:54 EBITDA grew 22 percentage quarter on quarter to 10.2 crore, and our EBITDA margin expanding 26.8 from 24.4 percentage in quarter one. And revenue grew faster than our operating cost. Paid was 6.6 pero up to 24 percentage quarter on quarter and one twenty nine percentage year on year. Compared to the last year, margins reflect 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 09/30/2026, our network stood at $2.63.6 crore, and we are net cash with cash and bank balance of 32.2 crore against borrowing of 17.3 crore.

6:49 During the half, we deployed approximately 16.7 crore 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 less... Larger scale of patient journey. This means OPD and diagnostic, IPD and ICU, surgery, pharmacies, and follow-up. Retaining the patients across these touch points improves utilization, different engagement, and support revenue per patient.

7:37 We acquired an international 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. 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% is also we are in discussion. As we move forward, our focus remains on improving utilization, strengthening specialty capabilities, enhancing case mix, integrated acquisition, and maintaining disciplined 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.

8:35 Thank you once again for joining us. I will now be happy to take your questions. Thank you. Thank you very much. We now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the customer's 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 may press star and one to ask a question. First question is from the line of from.

9:23 Please go ahead. I'm not getting the voice, mister. Yes, sir. Am I audible? Yeah. You are audible, and you are you are speaking on... From... Behalf of. Can you introduce yourself, please? Definitely, sir. So I'm a investor, and I am also looking into a fund that is called Doom Funds. It is based out of Beta Group that is in. So my question is on your ARPOP. So ARPOP is relatively very low. Like, if you compare it with the major hospitals. So what are your plans to increase the ARPOP? Sir, average revenue per occupied bed in consolidated, it is it is, like, $9,002.21 per day.

10:16 So, basically, if you are going for the stand alone and if you can see about on the stand alone, 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. So we are not catering them. It is only two percentage, but definitely, we are also having one internal committee, and we are thinking how to proceed and how to increase the ARPU in the coming quarter, and we will make one strategic plan over it. Okay, sir. That's that's good to hear. Sir, my second question is on the operating margin. So what operating margin can you guide us for the f five eight twenty seven and for the next upcoming years?

11:09 Exactly. About on the operating margins, I will give you an example. Always, are very concerned about our expenses. So, you know, the labor law is also there. So we are not cutting down the cost over over the staffing all. But where we are doing the concession and the discounting only over the expensive side, like the doctor incentives and doctor salaries. And we are putting the model over the full time model doctors. So there, we are giving the high margin from the operating cost, number one. Number two, we are concentrating on the over the footfall of the patients. If the direct patients comes, then, of course, the margin will be much more amount of a higher than the referral margins, like, coming from the insurance sites, from the TPS site. Then we have to give the discounts to the insurance sector. It's a policy law. But if the direct case patients, if we are targeting, then the margin will increase day by day. And we are we are on it, and our margin is also increasing if you will see our history.

12:13 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 sessions, 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 five, always be able to see the other hospital, whatever we have acquired. Then 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, sir. 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 margin, see, average margin will be there on a tenth, but quarter on quarter, it may be fluctuate or it may differ. But at the end of a year, the... It remains same, sir.

13:10 Sometimes it may give us if we will take the loan and if we do take with this and refund here, it can give the effects to the end of the year. But we are trying to save our... All the margin, all the expenses and give the good and better results. We have a. Actually, in this topic, I mean, the hospital, we have one we have an. The day to day, they are generating the remote that the very delicate, difference of the... Sometimes in the hospital is being delicate. The subsidiary is not giving the. So exactly the the internal are very useful here. Got it, sir. Thank you so much for taking my question. Congratulations on amazing set of number, and happy Diwali to you. Thank you. And you are...

14:01 I think you are coming from the hospital side. Have you invested somewhere else in hospitals? Yes, I am invested in other hospital staff as well. Because these questions are very specific. It is just like that some management people from the hospital side is asking. Thank you. Thanks a lot. Thank you very much. Participants, you may press star and one to ask a question. Next question is from the line of Gujarat Kidney from Blue. Please go ahead. Yes. Thank you. Thank you very much. Sir, congratulations on the good set of numbers. I think from I think the numbers are quite strong and healthy. Just wanted to ask from our acquisition pipeline, you know, pipeline point of view. I think we'd like to understand what kind of a CapEx strategy have you guys forecasted for this particular year from h two onwards for... In the lines of acquisition? And are we also expanding beyond Gujarat, or are we going to stick to Gujarat for the foreseeable future? That's my first question.

15:08 Your question is very specific. I would like to give the answers. First, we have acquired 51 percentage of our sub... We have 51 percentage of our subsidiary. So first focus is that that if we can pay 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. Value has been already decided. So first, we are looking for it after giving one or two quarters from there. Once they will prove themselves according to their commitment, then first, we would like to acquire their ticket sales. Number two Mhmm. I I forget your question. What was the number two? Any future acquisition That that only I told you that, can we... Yeah. We have a three subsidiary having the 51% of the first step, like, Dubai.

16:02 Second one, there is a large family in Peru. And third one, there is a Patel Multi Specialty in. So our first target that provide... Why we need this issue for full stake of our only subsidiary. So these are the three targets, and we are negotiating with them. And we are also doing results from them. Number two, you asked me about the acquisition for the greenfield project in Gujarat... In Central Gujarat or outside where we are looking after it. Let us see. There are specific criteria that are there that say if we do the acquisition, and the hospital has to be run by the doctors, like, minimum fifteen 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.

16:52 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 expansion of the hospital as well as to the hospital. That already we are planning and we are doing, sir. Understood. Thank you, sir. So my second question here would be, for the full year, what kind of guidance do you... Can you can give us with respect to margins and revenue given the high baseline that we have already achieved for this FY twenty seven for H1? It 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.

17:40 Okay. Understood. And lastly, sir, how much of a steady state occupancy do we expect with... And our ALOF as well if we are planning to introduce more complex therapies within this... Within NephroCare? Do you think that our ALOF and our overall should increase 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 specialty work. There, the margins are good. If you are comparing with the Nephro Plus, this Nephro Plus are doing only the dialysis, And we have the dialysis center in house our hospitals.

18:28 And the margins are very less into this dialysis business. Number two, the super specialty work like euro... Nephro Euro side, about on the complex surgery, on the cardiac side, major procedure, that gives the good margin. But in each and every quarter, the revenue and the profit will not be as constant. Again and again, I am emphasizing these words in the hospital industry. The patient will come. In some healthiest patients will be late. In the festival season, patients will be late. It is not like that if we are running any industry, steel industry or plastic industry. The festival will give the effects. The doctor's leave will give such kind of effects.

19:14 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 speak. But the quarter one will be high. Quarter two will be less. Quarter three will fluctuate. But, eventually, the year on year, if you will see, the expansion and the results is on a consolidated basis. And if we are going on a acquisition, it gives the best strengthening towards the balance sheet side. Mhmm. Understood. Okay. Thank you, sir, and all the best. Thank you. Thank you. Participants, you may press star and one to ask a question. Next question is from line of Devin Madlani from finance financial services. Please go ahead.

20:06 Hello? Yes. Tell me, sir. Can I answer? Can answer? You speak a little louder, please? Hello? Hello? Yeah. 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 as the payer mix 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 majority of the payments are coming from the insurance side? Sir, are you sitting with someone else someone else? Because you are not speaking the...

20:52 I mean, loudly. Can you speak loudly to get the... Get your query correctly? So I can also just speak over it. Hello? Hello? Hello? David, 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? Yeah. Just a second. Hello? Is it clear now? Hello? Is it clear now? Yes. Go ahead. But I wanted to ask that debt has been continuously, and a lot of receivables have been accumulated in the balance sheet. So has the things changed? So now the insurance companies are paying more of the... More from the customers or the other customers are paying for themselves?

21:43 Your question is that, okay, the receivables are on a higher side, number one. Yes. Yes. Yes. Yes. One one minute. The receivables, they're on a higher side, but from the April 1, we are very strict over it, and there there is no tendency for more than one hundred and hundred and two or one or one fifteen days. Before that, all the subsidiaries or even in the stand alone hospital side, we are very liberal, and we are doing the work as per the patient's reason, we are giving the discount also. But from the April 1, if you will see the receivable are late. These receivables are accumulated receivables, not the recent one receivables. And, yes, recoveries are going on, sir. Okay. Okay. Got it. So I feel most of them are accumulated ones, and maybe we'll receive them from insurance companies.

22:37 Yes. Definitely. See, nowadays, the government are also paying after six months, and sometimes the fees are there in all the hospitals around... Mean, if if we are not taking task in time, in some cases are going into the query site. And after once, the query, they will generate, then they will take much more amount of a time. Patients are coming from the corporation side. Patients are coming from the government scheme side. So that's kind of a patient. We are treating and we are giving the dispatch. So there there is a process to submit the bill. After the submitting of a bill, they will generate the query. And if we will miss that portal and if we will miss the query reply, then they will they will hold that amount of our money. Then, again, we have to go to the center in person. So such exercise, we have to... Supposed to do it.

23:29 In the same way now, the insurance companies have started into the Speciality Limited. So pendency will be there. But, of course, that payment are on track. It is 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 Blue Tree acquisition that we did in Dubai. So how is it related to the super specialty business that we are currently doing? So any specific rationale for it? I already told you that the super specialty business is good for the margin purposes, number one. Number two, Blue Tree is a polyclinic, And Mhmm. Which is run by doctor Ahmed.

24:15 And doctor Ahmed is a renowned doctor there and having a good profitability since last five 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 a net profit. So each and every hospital has a different peculiarity. Blanketly, we are not going our... All the thoughts over one hospital. Okay. Okay. Okay. Okay, sir. Thank you. That... That's all from my side. Okay. Thank you. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of from Alpha Capital. Please go ahead.

25:06 Hello. Am I audible? Yes. Uh-huh. How are you doing? Hi. Hi. Thank you for this opportunity. So I would like to ask, operating cash flow is roughly 0.4 crore in h one and against the path of 11.9 crore. So just wanted to understand where is the cash going? What is the usage? I will also ask to my consultant's other accountant One bit. Okay. Okay. So the second We have done the 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 rough idea on what our revenue for FY twenty seven would look like in EBITDA margin guidance?

26:04 It is very difficult to say on this platform. And number two, that we have to we have to do our work, whatever we are doing, and we are delivering the results. And about on the history facts, can make out about the... Both. This is the only way to convey about these questions on this platform for you. Okay. Understood. And, sir, how many acquisitions are in the pipeline, and how will you find them? A very short 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 the... Our existing subsidiary.

26:53 Whatever the work we are doing for the acquisitions that we have not implemented to any extent. So we cannot declare. It's our internal commitment to our hospital site. So we cannot declare such kind of answers here. Okay. And we did the MBA, but we we we should not pay that about the acquisition we'll be there in future about on the website. Yes. We are planning to do it. Noted. Thank you, sir. Thank you very much., press star and 1 to ask a question. Next question is from the line of from associates. Please go ahead. Yeah. Thank you so much for the opportunity.

27:39 I just wanted to know that your EBITDA margins have fallen from 48% in h y... In h one FY twenty six to 25% in h one FY twenty seven. So is this 26% the new normal, or will it go back towards 40%? Sir, EBITDA margin will fluctuate, but at the end, it becomes average. And EBITDA... My EBITDA margin is fluctuating due to the recent acquisitions. That is the only answers what we can say. Second thing second thing is the EBITDA, whatever you are seeing on a consolidated basis, having the average EBITDA. Some some hospital having the higher amount of EBITDA where the specific super specialty works are there, and some having the mixed EBITDA where the multi specialty works are there. But, evidently, it comes to exactly what we have as of now at the end of this '27.

28:42 That is a rough idea. We can give the guide. We can indicate it. But, ultimately, the numbers speak at the end itself. Okay. And the employee cost also jumped to 41% in quarter one from $5.05 crores to 7 crores. So is the q two the new run rate? Employee cost is due to the... Again Employee cost, I'm telling you 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.

29:42 Understood, sir. Yeah. That's it from my side. Thank you so much. Thank you. Three quarters of the eight. Thank you very much. Participants, you may press star and one to ask the question. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants, you may press star and 1 to ask a question. As there are no further questions, I'll now hand the conference over to the management for closing comments.

30:38 Yeah. Very nice to hear from all the stakeholders and from the investor side. Thank you. Thanks a lot. And, 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, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you. Thank you.