Gujarat Kidney IPO

They run with strong margins, which is just a simple way of saying they keep a lot of what they earn as profit. For FY25, they reported an EBITDA margin of 41.12% (core operating profit) and a profit margin of 23.61%. Their return on equity is 36.61%, which shows they’re generating solid earnings on the money shareholders have put into the business.

They’ve grown fast by buying controlling stakes in multiple hospitals (meaning they buy enough ownership to run the show). Because of these acquisitions, their proforma revenue (revenue shown as if all the acquired hospitals were owned for the full year) reached ₹119.97 crore in FY25. This has also pushed total bed capacity up to 539 beds, which is much bigger than what they could offer on a standalone basis.

They follow an asset-light approach, meaning they lease important properties instead of owning the land and buildings. For example, they lease their main hospital in Vadodara and the Godhra facility. This helps keep upfront spending lower, and you can see that in their fixed asset turnover ratio of 2.04 (a measure of how much revenue they generate for every rupee tied up in fixed assets), letting them scale without pouring huge money into real estate.

They have a strong edge in renal sciences (kidney-related care), with more than 2,700 endourology procedures done and 200 urologic oncology surgeries in recent years. Endourology is a minimally invasive surgery done using small instruments and a scope, and urologic oncology is cancer treatment related to the urinary system. This kind of specialist focus supports a proforma average revenue per occupied bed of around ₹10,255.

They’re trying to avoid the “payment delay” problem by leaning more on self-paying patients and private insurance. In the three months ended June 2025, these sources made up 80.64% of revenue. Government schemes were only 5.46%, which matters because public reimbursements often take longer, creating a longer receivables cycle (time taken to actually collect the money).

The company, in its current form, is pretty new. Most of the real business activity only started in February 2024 after a business transfer agreement (basically, operations were shifted into this entity through a formal transfer). Because of that, it doesn’t have a long track record yet, and financial numbers from before FY24 aren’t really apples-to-apples for judging stability over time.

All of their hospitals and operations are concentrated in central Gujarat, mainly Vadodara, Godhra, and Bharuch (with 100% of revenue coming from the state, where South Gujarat contributed 41.52% and Central Gujarat contributed 37.09% of proforma revenue). That’s a risk because if this specific region faces a slowdown, a natural disaster, or even local political issues, the impact can hit almost the entire business at once. They don’t have geographic diversification (spreading across multiple regions) to cushion that kind of shock.

For FY25, they reported a proforma average bed occupancy of 56.12%, which means almost half the beds are empty on an average day. Low occupancy can hurt hospital economics because many costs (staff, utilities, maintenance) stay more or less fixed even if beds aren’t filled. If patient volumes don’t rise, operating efficiency and returns on invested money can suffer.

Collections look a bit stretched, which can create working capital pressure (cash getting stuck in day-to-day operations). As of March 31, 2025, trade receivables (money customers and insurers still owe) were ₹15.16 crore. That’s 37.66% of revenue from operations, so a meaningful chunk of earnings is sitting as unpaid bills rather than cash in the bank.

A lot of their key locations, including the registered office and main hospitals, are on leased premises, with lease terms ranging from 7 to 11 years. If they can’t renew these leases on reasonable terms, or if there’s a dispute with the landlord, they could be pushed into expensive relocations. And in healthcare, shifting a hospital isn’t just costly; it can disrupt patient care and hurt trust.

They plan to use ₹77 crore from the IPO to acquire Parekhs Hospital, on top of other entities they’ve bought recently. Buying hospitals is one thing; stitching them together smoothly is another. Integration risk is the challenge of aligning systems, staff, processes, and culture; if that doesn’t go well, it can create inefficiencies and drag down financial performance.

They do a meaningful amount of business with related parties, like paying rent to the Promoter and buying pharmacy supplies from Promoter-linked entities. In FY25, these related-party transactions made up over 8% of revenue. That doesn’t automatically mean something is wrong, but it can raise conflict-of-interest concerns; basically, investors may wonder whether all deals are happening at fair, market-based terms.