Nephrocare Health IPO

It is India’s largest dialysis service provider and is 4.4 times bigger than the next largest organised player as of FY24. On top of that, it is the largest dialysis provider in Asia and the fifth largest in the world based on the number of treatments done in FY25. This kind of scale gives it a strong edge over competitors and helps it hold a clear leadership position in the market.

EBITDA (operating profit) excluding other income grew at a very strong CAGR of 85.18% between FY23 and FY25. Its EBITDA margin also moved up steadily from 11.11% in FY23 to 23.30% in the six months ended September 30, 2025.

The cost of materials used fell from 32.59% of revenue in FY23 to 22.94% for the six months ended September 30, 2025. This improvement mainly comes from centralized procurement (buying in bulk at better rates) and vertical integration, including contract manufacturing of key consumables like acid and bicarbonate used in dialysis. As it grows bigger, it is clearly benefiting from economies of scale and smarter cost control.

It follows its own proprietary RenAssure clinical protocols across all 519 clinics worldwide, so treatment standards stay consistent no matter where a patient goes. Its training arm, Enpidia, is India’s only institute accredited by BONENT, a U.S.-based body that certifies dialysis professionals. This focus on structured protocols and certified training helps ensure reliable clinical outcomes, builds patient trust, and keeps service quality high.

Its asset-light model is built around revenue-sharing arrangements with hospitals (covering 52.41% of its clinics) and public-private partnership (PPP) formats with governments. Because it does not over-invest in owning heavy infrastructure, most captive and acquired clinics are able to hit operational breakeven within just three to four months. This makes it easier for the company to expand quickly, both in India and overseas, without locking up too much capital.

Its average revenue per treatment is strong at ₹2,531.05 for the six months ended September 30, 2025, which has increased from ₹1,912.4 in FY23. In simple terms, the company earns a healthy amount every time it provides a dialysis session. This suggests good pricing power, supported by its reputation for high-quality care using its RenAssure clinical protocols and its presence in international markets where each treatment typically brings in higher revenue.

The company uses its clinics quite efficiently, with an average utilization rate of 74.99% in the six months ended September 30, 2025. A high utilization rate means the machines and facilities are busy and not sitting idle. This level of usage points to smart scheduling and good patient flow management, which is key to getting strong returns from each clinic, especially when the upfront capital required per clinic is relatively low.

The business is good at turning its accounting profits into actual cash. In FY25, net cash flow from operating activities was 81.22% of EBITDA. In simple terms, most of what it earns at the operating level shows up as real cash in the bank. That strong cash conversion gives it more internal funds to reinvest into opening new clinics and expanding the business without relying only on external funding.

It has already scaled up to four countries and operates a global network of 519 clinics. In the six months ended September 30, 2025, revenue from outside India contributed 39.96% (₹189.22 crore) of its revenue. This shows that its business playbook works not just in India but also in international markets, and that its model can be replicated across geographies.

A big chunk of its business comes from captive clinics inside hospitals (36.51%) and PPP (public-private partnership) contracts with governments (30.96%). Together, these models made up 67.47% (₹319.45 crore) of dialysis revenue in the six months ended September 30, 2025. If hospitals choose not to renew contracts, or if the company fails to win or retain PPP tenders in competitive bids, its revenue and growth outlook could take a serious hit.

The company takes a long time to collect its dues, with trade receivable turnover days at 126.68 days as of September 30, 2025. This means it waits more than four months on average to get paid. Such delayed collections put pressure on working capital and force the company to depend more on short-term borrowing and other financing to keep day-to-day operations running smoothly in the meantime.

The business critically depends on experienced healthcare professionals, especially nephrologists (kidney specialists). Attrition among nephrologists was very high, 61.23% in FY24 and 53.05% in FY25. If such high turnover continues, it could become harder to maintain uniform care quality and smooth operations across its growing global network of clinics.

One of its subsidiaries in Uzbekistan faced cyber fraud in FY24, with losses of about ₹1.84 crore. This episode underlines the risks of depending on centralized IT systems and the challenge of keeping highly sensitive patient and financial data safe when operating across multiple countries and regulatory environments.

As of the date of filing the RHP, two standalone clinics were still waiting for fire No Objection Certificates (NOCs) from local authorities. Delays in getting such compulsory approvals, or any gaps in meeting regulatory requirements, can disrupt operations. In the worst case, the company could face fines or even be forced to shut certain clinics temporarily or permanently.

In Uzbekistan, the company currently enjoys a 0% corporate income tax rate because it operates in the social services sector. If this local tax benefit is withdrawn or changed in the future, its tax outgo in that market would rise sharply. That would reduce profitability from Uzbekistan and could lower overall returns from its international operations. For H1 FY25, revenue from Uzbekistan accounted for 9.61% of its revenue from operations.

Even though the company follows an asset-light model, the long time it takes to collect receivables means it has to carry a fairly high level of debt. Total borrowings stood at ₹207 crore as of September 30, 2025. This dependence on debt to support working capital makes the company more sensitive to rising interest rates and tougher credit conditions in the lending market.

The company’s name, "Nephrocare Health Services Limited," is quite similar to "Nephro Care India Limited," which is listed on NSE EMERGE. This name overlap can confuse investors, especially retail ones, and might lead to orders being placed in the wrong stock or sentiment being affected by news related to the other, unrelated company.