Company Overview. Financial Performance

Transcription

1 Jan/15 Feb/15 Mar/15 Apr/15 May/15 Jun/15 Jul/15 Aug/15 Sep/15 Oct/15 Nov/15 Dec/15 KMC Speciality Hospitals India Ltd CMP: 7.61 January 21, 2015 Stock Details BSE code BSE ID KMCSHIL Face value ( ) 1 No of shares (m) week H/L 10.84/1.98 Market cap ( m) 1, days avg vol (No) 99,720 Free float ( m) 310 Stock performance (%) 1M 3M 12M Absolute -5.6% 99.0% 189.5% Rel. to Sensex 1.3% 111.2% 206.5% Shareholding Pattern* (%) Promoters FIIs DIIs Others 75.0% % 25.0% % *As of September 2015 Relative Chart KMC Speciality Hospitals India Limited Sensex 30,000 29,000 28,000 27,000 26,000 25,000 24,000 23,000 22,000 Company Overview KMC Speciality Hospitals India Ltd. operates hospitals and offer trauma, intensive care, cancer therapy, cardiology, dentistry, gastroenterology, general medicine, toxicology, kidney care, maternity, neurology, neurosurgery, orthopedics, pediatrics, and radiology services. Industry Overview India s healthcare sector is one of its largest sectors both in terms of revenue and employment and comprises of hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services and increasing expenditure by public as well private players. The sector also offers cost competitiveness compared to its peers in Asia and Western countries. The cost of surgery in India is about one-tenth of that in the US or Western Europe. Financial Performance KMC Speciality Hospitals India Ltd revenues from operations for FY 15 rose 13.8% to million compared to million in the previous year. The company has reported a net profit of 1.2 million in FY 15, opposed to a net loss of 3.0 million in FY 14. On Q-o-Q basis KMC Speciality Hospitals revenues have grown 19.3% to million in Q2 16 than that of 87.9 million in Q2 15. Table1: Key Financials (Y/e March) 2Q FY15 2Q FY 16 Sales ( m) Source: Bloomberg YoY Growth (%) 46.5% 10.6% 13.8% 11.3% 19.3% EBITDA ( m) EBITDA Margin 21.4% 15.1% 16.1% % PAT ( m) 9.4 (3.0) EPS ( ) 6 (2) 1 NA 0.1 YoY Growth (%) 2% % 15% NM NM Source: Company, Karvy Investment Advisory 1

2 Background and Business Description KMC Speciality Hospitals India Ltd is a healthcare services company, which is engaged in offering a wide range of services including trauma, intensive care, cancer therapy, cardiology, dentistry, gastroenterology, general medicine, toxicology, kidney care, maternity, neurology, neurosurgery, orthopedics, pediatrics, and radiology services. The company has a strong culture of personalized patient care, and a reputation of having established centers of excellence across all medical specialties and allied health services and be regarded as the most valued service provider with national acclaim. Key Strengths Strong brand reputation Risks & Concerns Intense Competition Increasing cost of resources Board of s Table 2: Composition of Board Name Dr S Chandrakumar Dr D Senguttuvan Dr S Manivannan Mr A Krishnamoorthy CA S Chenthilkumar Mr B Pattabhiraman Mr S Krishnamurthy Dr S Vijayabaskaran Mr N Bala Baskar Mrs Jayanthi Narayanaswamy Source: Company Relation with Company Managing & CEO Executive 2

3 Industry Overview The Indian healthcare sector is growing at a brisk pace due to its strengthening coverage, services and increasing expenditure by public as well private players. According to a report by IBEF, the healthcare sector of India is expected to register a compound annual growth rate (CAGR) of 22.9 per cent during to $280 billion. Rising income level, greater health awareness, increased precedence of lifestyle diseases and improved access to insurance would be the key contributors to growth. The private sector has emerged as a key force in India's healthcare industry. It accounts for almost 74% of the country s total healthcare expenditure. Telemedicine is a fast-emerging trend in India; major hospitals (Apollo, AIIMS, Narayana Hrudayalaya) have adopted telemedicine services and entered into a number of public-private partnerships (PPP).The telemedicine market in India is valued at $7.5 million currently and is expected to grow at a CAGR of 20% to reach $18.7 million by 2017.Further, presence of world-class hospitals and skilled medical professionals has strengthened India s position as a preferred destination for medical tourism. The Government of India aims to develop India as a global healthcare hub. It has created the National Health Mission (NHM) for providing effective healthcare to both the urban and rural population. The Government is also providing policy support in the form of reduced excise and customs duty, and exemption in service tax, to support growth in healthcare. There is a significant scope for enhancing healthcare services considering the rise in healthcare spending as a percentage of Gross Domestic Product (GDP). Rural India would emerge as a potential driver of demand as it accounts for over 70% of the population. Competition analysis Company CMP ( ) Mcap ( m) Rev ( m) OPM (%) EPS ( ) PE (x) KMC Speciality Hospitals India Ltd % Kovai Medical Center & Hospital Ltd % Fortis Malar Hospitals Limited % Source: BSE 3

4 Financial Analysis For the period ending 31 March, 2015, KMC Speciality Hospitals India Ltd reported revenues of million, representing 13.8% gain when compared to the revenues in FY 14. The company s EBITDA stood at 58.4 million in FY 15 and its EBITDA margin improved 100 bps to 16.1% from being 15.1% in FY 14. Year end March Income statement ( million) Revenue % growth 46.5% 10.6% 13.8% EBITDA % EBITDA margin 21.4% 15.1% 16.1% Depreciation and amortisation EBIT Interest PBT 13.6 (15.5) 1.2 Tax (credit) expense 4.3 (12.5) - Net profit 9.4 (3.0) 1.2 % growth net profit 16.5% % 141.9% Balance sheet ( million) Shareholder fund Long term liabilities Current liabilities Fixed assets Current assets Cash & cash equivalents Cash flow statement Cash flow operations Cash flow from investing Cash flow from financing Per share data EPS ( ) CEPS ( ) DPS ( ) BVPS ( ) Financial Ratios % ROE 7.0% -2.5% 1.2% ROCE 18.4% 2.6% 9.9% Debt/Equity 105.9% 130.6% 102.6% Interest coverage ratio Current ratio Cash ratio Source: Company, Karvy Investment Advisory 4

5 Financial Snapshot Revenue growth (%) EBITDA margin (%) 40 5% % % 3% 2% 1% % 15.0% 1% 5.0% % % Revenue ( m) % growth EBITDA ( m) % EBITDA margin Net Profit Margin (%) 4.0% 3.0% 2.0% 1.0% % -1.0% -2.0% BVS & EPS Net Profit ( m) % net profit margin Book value per share ( ) EPS diluted ( ) Liquidity ratios Profitability ratios % % 1% 5.0% % -5.0% Current ratio Cash ratio ROE ROCE Source: Karvy Investment Advisory 5

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