KMCH Q2 FY27: standalone PAT +31% YoY to ₹77 Cr, margins expand, just misses ₹79-82 Cr view

Kovai Medical Center & Hospital's standalone revenue from operations rose to ₹472.63 Cr (+20.9% YoY, +9.6% QoQ) and PAT came in at ₹76.97 Cr (+30.8% YoY, +11.4% QoQ), EPS ₹70.34 against ₹53.79 a year ago. There is no consolidated statement — the company has no subsidiary, associate or JV. Revenue cleared our pre-result expectation of ~₹445 Cr by about 6%, and operating margin at ~28.97% landed inside the ~28-29% band we flagged, but PAT settled just below the ₹79-82 Cr range despite pre-tax profit of ₹103.75 Cr growing a stronger 33.2% YoY — the effective tax rate ticked up to 25.8% this quarter from 24.4% a year ago and 24.5% last quarter, trimming the bottom line relative to the pre-tax beat. The margin expansion itself is real and broad-based: OPM widened to ~28.97% from 27.30% YoY and 28.74% QoQ, and NPM to 16.01% from 14.77% YoY and 15.75% QoQ, even as depreciation (+24.8% YoY to ₹33.42 Cr) and consulting charges to doctors (+15.9% YoY to ₹63.46 Cr) both rose with the hospital's capacity build — consistent with the operating-leverage thesis in our preview, though the filing does not break out occupancy or ARPB, so that specific watch item stays unresolved from disclosed data. The Healthcare segment drove it, with PBIT up 29.2% YoY to ₹113.31 Cr; the smaller Education segment's PBIT fell to ₹5.65 Cr from ₹10.94 Cr sequentially (roughly flat YoY at ₹5.35 Cr), a timing-driven drag rather than a trend. Analyst coverage of KMCH remains thin with no published consensus estimates or price targets found across major platforms, so our own pre-result band is the only available benchmark here — management itself gives no formal forward guidance on record, so this print can only be graded against that bar and against trend, not against a stated company target. Separately, on 27-Oct-2026 the company received a Customs adjudication order on a 1988 machinery-import matter fixing ₹2.11 Cr payable plus an estimated ~₹10 Cr interest; no provision has been booked and management says it is evaluating its response, so this sits as an off-P&L contingent liability rather than a hit to this quarter's reported profit. Capital work-in-progress rose to ₹182.48 Cr from ₹134.96 Cr at FY26-end as the announced ₹120 Cr neuro-sciences block and ₹300 Cr Sulur/children's-hospital expansions progress, while non-current borrowings actually fell to ₹289.57 Cr from ₹317.35 Cr — leverage stayed contained even through the capex ramp. The next quarter is the real test of whether margin expansion holds as more of this capacity comes online, and whether the Customs order turns into a booked provision.