KIMS shares: Axis Direct names pick of the week with 'Buy' call; sees 10% upside

Axis Direct has named Krishna Institute of Medical Sciences Ltd (KIMS) as its 'Pick of the Week', assigning a 'Buy' rating on the stock with a target price of Rs 792, indicating an upside potential of around 10 per cent from the brokerage's calculated market price of Rs 720. The brokerage has set a time horizon of six to nine months.

Axis highlighted KIMS' strong operational track record, regional leadership and capital-efficient expansion strategy as key growth drivers. The company continues to pursue a brownfield and asset-light growth model, combining lease-based additions and selective acquisitions to scale up while maintaining financial prudence.

According to the brokerage, KIMS is nearing completion of a well-planned expansion phase undertaken over the past two to three years. The company aims to add around 1,800 beds in the next 12 months -- largely in the second half of FY26 -- through brownfield expansions in Telangana and Andhra Pradesh and new facilities in Karnataka, Maharashtra and Odisha.

KIMS maintains a strong presence in Telangana and Andhra Pradesh while expanding its footprint in newer markets such as Karnataka and Maharashtra. Axis Direct noted that the company's replicable cluster-based model enables operational synergies, efficient doctor utilisation and stable occupancy ramp-up in new hospitals.

On the valuation front, KIMS is trading at 33x/25x EV/EBITDA for FY26E and FY27E. Axis Direct expects that the company's expansion plans, improved specialty mix and focus on operational efficiency will support sustained profitability despite a temporary dip in occupancy levels.

Headquartered in Hyderabad, KIMS Hospitals operates a network of 25 hospitals with over 8,000 beds across South and West India. The multi-specialty chain follows a hub-and-spoke cluster model, offering tertiary and quaternary care across key areas such as cardiology, oncology, neurology and orthopaedics.