Event Participants
Executives
4 Prashant Goenka, Rohit Singh, Vikram Vuppala, (Kamal Shah - Co-Founder, present but no speaking lines)
Analysts
12 Akshay Thakur, Aniket Singh, Anuj Goyal, Devang Patel, Kushal Chovatia, Naman, Nilanjan Karfa, Pawan Kumar, Pranav Chawla, Shubh Mehta, Siddharth Negandhi, Simran Thakkar
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹282 crores | +23.7% YoY (₹228 cr in Q1 FY26); driven by higher treatment volumes and international mix |
| Adjusted EBITDA | ₹65.1 crores | +30.7% YoY; margin expanded 120 bps to 23.1%, helped by COGS improvement of 175 bps |
| Adjusted PAT | ₹37 crores | +41.7% YoY (₹26 cr); margin improved to 13.1% from 11.4%, aided by lower finance costs and operating leverage |
| Active Guests | 38,262 | +13% YoY from 33,868; key volume driver for the business |
| Treatments | 10.3 lakh | +13.3% YoY from 9.1 lakh; steady per-guest treatment frequency |
| Revenue per Treatment (RPT) | ₹2,733 | +9.2% YoY from ₹2,503; driven by higher international contribution where realizations are higher |
| Network | 550 clinics across 5 countries, 370 cities | Added 26 clinics in quarter (19 India, 7 Philippines); India: 307 cities across 25 states |
| International Revenue Share | ~45% | Up from ~30% 18 months ago; primary driver of RPT and margin improvement |
| Annualized Adjusted ROCE | 21% | Reflects working capital requirements accounted for in project evaluation |
| Capex | ₹44 crores | Similar to ₹43 cr in Q1 FY26; towards center acquisitions and growth |
| Working Capital (AR Days) | 101 days | Improved from 121 days last year; aided by digitization and AI-led process improvements |
| Utilization | 74% | Network-level utilization reflecting all markets |
Geographic & Segment Commentary
India: Added 19 clinics in the quarter (a blend of PPP in Bihar, private clinics, and greenfields). CGHS saw a lumpy ~35% price increase in October 2025 after 10-11 years. India RPT remains at $20-23. India platform remains the core driver of profitability, with organized market penetration still only at 21-22% after 16 years of Nephroplus operations.
Philippines: Added 7 clinics, crossing 50 clinics across 39 cities; became the second-largest distributed dialysis network in six years. Market is highly fragmented with ~900 clinics, majority mom-and-pop operations. Saw 55-60% price increase in October 2024, at typical price points averaging 10-12 bed centers. All acquisitions done at center level with variable goodwill.
Uzbekistan: Only private operator in the market; serving ~1,800 of close to 9,000 patients. Demonstrated strong clinical outcomes and delivered projects in record time versus any other provider in the region.
Saudi Arabia: Investment phase; first clinic at Riyadh Hospital operational in July 2026, home dialysis commenced, medical operator's license obtained. Formal tendering process expected to begin in a couple of months; binary market - win a cluster in tender or exit.
Kazakhstan: New subsidiary incorporated during the quarter as platform to evaluate opportunities across the country and Central Asia; market similar to Philippines with universal coverage, price points around $75 but still in early evaluation stage.
Company-Specific & Strategic Commentary
Quality as Foundation: Quality team reports to Chief Medical Officer, not business heads; every clinic undergoes monthly clinical audit with ranking on clinical outcomes. Early Vascular Access program in Andhra Pradesh (21 centers, 2,000 guests) moved monthly AVF creations from 15% to 30% of guests, reducing mortality to close to 15%.
Nephroplus Index: Single composite health score from seven weighted clinical matrices, live across 29 centers and 2,600 guests; being used to predict outcomes and intervene at individual guest level, to be aggregated up to cluster, zone and country level.
NIDA Academy: In-house Nephroplus International Dialysis Academy launched to build pipeline of renal nurses; first batch begins Q3 FY27. Addresses the structural constraint of trained renal nurse availability for international expansion.
Cost Levers: Four distinct platform levers - global procurement and contract manufacturing of consumables, efficient HR through training academies, in-house biomedical team (avoiding manufacturer information asymmetry), and lean operating model built in India at lowest global price point.
AI & Technology: RFID-based asset tracking reducing depreciation (doubled machine deployment efficiency - replaced 50 machines monthly previously, near zero fresh machines in last 3 months); AI-driven live auditing via CCTV for clinical compliance; predictive adverse event AI failed first attempt, second phase underway.
PPP Discipline: Deepened Bihar footprint, signed new Tamil Nadu contract, exited two value-dilutive Uttarakhand clinics. Management stated they will not pursue business that does not meet return thresholds.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 15-20% medium-term over next 3-5 years | Maintained guidance; anchored on three levers: same-center growth, geographic expansion, new markets |
| India Clinic Additions | 40-50 clinics per year | Strategic level guidance provided, not quarterly |
| Philippines Clinic Additions | 10-15 clinics per year | Strategic level guidance; 7 acquisitions in Q1 FY27 alone |
| New Market Entry | 1 new international market every 12-18 months | Continued focus; Saudi tender, Kazakhstan evaluation, other business development in progress |
| Tax Rate | ~20% (current level is good proxy) | Composite of India (25%), Philippines (25%), Uzbekistan (0% tax rate); fluctuates with revenue mix |
| Saudi Arabia | No clear visibility on tender timeline | 3-4 quarters away from realizing benefits or having clear visibility; investment phase continues |
Risks & Constraints
| Risk | Context |
|---|---|
| Saudi Tender Uncertainty | Binary market - if company doesn't win one of four clusters in tender, they will exit the market. Investment phase requires upfront costs with no clear timeline (tender expected in a couple of months, formal tendering to follow). Current losses ~₹3 crores/quarter may continue for rest of fiscal. |
| Structural Working Capital | AR cycle of 3-4 months due to government payer model; AR days improved from 121 to 101 days, but management expects relatively high AR as structural industry reality. ECL provisions of 2-2.5% of revenue on quarterly basis. |
| Unorganized Market Conversion | 78-79% of dialysis capacity still in hospitals running in-house operations; conversion to organized market is a pure financial optimization decision for hospitals and will play out over several years. |
| Forex Volatility | Minimal impact this quarter (₹20 lakh favorable); international business at 45% of revenue introduces currency exposure. |
| Price Increase Cyclicality | Dialysis price increases are lumpy and infrequent (CGHS last increased after 10-11 years at ~35%); RPT CAGR of ~11% not sustainable at that level - will fluctuate based on international mix and lumpy pricing events. |
| Fixed Capacity Business Model | Dialysis permits only ~3 cycles per machine per day (4-hour mandatory treatment time); growth requires capacity addition, limiting same-store growth story unlike other healthcare segments. |
Q&A Highlights
Depreciation and Asset Management
- Question: What is the depreciation timeline for machines and equipment? (Akshay Thakur, Helios Capital)
- Answer: Machines depreciated over 7-10 years depending on country and regulatory requirements; depreciation as % of revenue flat at 8.6-8.7%. RFID-based tracking has reduced depreciation in India; Philippines acquisitions add goodwill/intangibles amortized over 5-7 years. RFID improved deployment efficiency - previously ~50 machines/month replacement, near zero fresh machines in last 3 months. (Prashant Goenka)
Margin Improvement Drivers
- Question: How much of margin improvement is from international mix vs inherent cost improvements? (Siddharth Negandhi, Chanakya Wealth Creation)
- Answer: COGS as % of revenue improved by 175 bps - key driver was taking procurement platform built in India (lowest price point globally) to higher-price markets for meaningful efficiency gains. Not a new-vs-mature model; OpEx breakeven happens within first few months of a running center. (Prashant Goenka)
Competitive Moat & Hospital Partnerships
- Question: What is the moat and differentiation from hospital-run dialysis? (Aniket Singh, Kotak Institutional Equities)
- Answer: Dialysis requires massive scale and 100% focus - Nephroplus was PAT negative for 13 years building this. Four levers create supranormal margins: global procurement, HR training academies, in-house biomedical team, lean operating model. Hospitals don't make money on pure dialysis (adjacency revenues are where profits are), so outsourcing is a pure financial optimization decision. 300+ private hospitals partner with Nephroplus. (Vikram Vuppala, Rohit Singh)
RPT Growth Sustainability
- Question: What drives the ~11% RPT CAGR and will it continue? (Aniket Singh, Kotak Institutional Equities)
- Answer: International mix improvement (revenue from 30% to 45% in 18 months) is primary driver; Philippines saw a one-time 55-60% price increase in October 2024 after 10 years - lumpy pricing events shouldn't be extrapolated. Numbers will fluctuate based on new market entries and mix changes. International share will continue to inch up with India remaining the core platform. (Prashant Goenka)
Saudi Arabia Investment/Costs
- Question: How many clinics needed to achieve breakeven in Saudi, and can losses ramp further? (Devang Patel, Sameeksha Capital; Pranav Chawla, Ambit Asset Management)
- Answer: Saudi is a tender market - not about clinic count but winning the tender. First clinic is a showcase to demonstrate clinical outcomes in regulated environment. If tender is won, historical losses will be more than recouped; if not, company exits market. Losses may continue for rest of fiscal with no clear guidance; tender timelines not fully within company control. (Rohit Singh, Vikram Vuppala)
Tax Rate Guidance
- Question: Any assumption on tax rate for the year? (Kushal Chovatia, Nomura)
- Answer: India and Philippines at 25% (India has healthcare services exemption if >90% revenue from healthcare), Uzbekistan at 0% tax rate. Composite ~20% is a good proxy; may fluctuate with revenue mix. (Prashant Goenka)
India Capacity/Utilization
- Question: What is the India RPT and Philippine acquisition bed capacity? (Shubh Mehta, ICICI Securities)
- Answer: India RPT at $20-23 price point average for the country. Philippines centers average 10-12 beds per center including recent acquisitions. Network-level utilization at 74% consolidated. (Prashant Goenka, Rohit Singh)
Market Share & Competition
- Question: What is the market share in Philippines and Uzbekistan? (Pawan Kumar, Shade Capital)
- Answer: Philippines - second largest network with 51 of
900 standalone clinics (6-7% share); largest chain has 58 clinics. Uzbekistan - only private operator; market has ~9,000 patients, serving ~1,800. Competitive advantages: scale, brand, operating leverage in Philippines; strong clinical outcomes and goodwill in Uzbekistan. (Rohit Singh)
Why No Country-Level Reporting
- Question: Will you split patient counts by geography for same-store growth analysis? (Nilanjan Karfa, TCG AMC)
- Answer: Company is a platform story, not country-level story; India generates efficiency across all markets. As company grows to 10-15 countries in 5-10 years (from 5 today), country-level micro-analysis is not useful - Fresenius and DaVita also report only at consolidated level. Dialysis is a fixed-capacity business (only 3 cycles per machine per day); growth is capacity-additive, not same-store driven. (Vikram Vuppala, Rohit Singh)
Corporate Costs & Other Expenses
- Question: What led to increase in other expenses? (Pranav Chawla, Ambit Asset Management)
- Answer: Three factors - ECL provisions of 2-2.5% of revenue (KPMG-designed model), public company costs (audit fees, legal), and international business development investments before markets start. Sequential improvement of 133 bps quarter-on-quarter. (Prashant Goenka)
Key Takeaway
Nephrocare delivered a steady Q1 FY27 with revenue up 23.7% YoY to ₹282 crore, adjusted EBITDA growing 30.7% to ₹65.1 crore (23.1% margin, +120 bps), and adjusted PAT up 41.7% to ₹37 crore. Growth was driven by 13% guest growth to 38,262 and 13.3% treatment growth to 10.3 lakh, with international business now contributing 45% of revenue (up from 30% eighteen months ago) and RPT up 9.2% to ₹2,733. The company added 26 clinics (19 India, 7 Philippines) to reach 550 clinics across 5 countries, while maintaining disciplined capital allocation evidenced by 21% annualized ROCE and 101-day AR (improved from 121). Strategic investments center on the Nephroplus Index clinical scoring platform, NIDA nursing academy for global talent pipeline, and AI-led operational efficiency (RFID asset tracking, live audit, predictive modeling in development). Management maintained 15-20% medium-term growth guidance, planning 40-50 India and 10-15 Philippines clinic additions annually with a new international market every 12-18 months. Key watch points: Saudi Arabia tender outcomes represent a binary bet with ~₹3 crore quarterly losses during investment phase, and the company continues navigating a structurally high working capital environment inherent to government-reimbursed dialysis while converting an 78-79% unorganized market opportunity.