Krishna Institute of Medical Sciences Limited submitted its Business Responsibility and Sustainability Report (BRSR) for the financial year 2025-26 to the stock exchanges on August 5, 2026, in compliance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The report is accompanied by an Independent Practitioner's Reasonable Assurance Report issued by M/s. Brahmayya & Co., Chartered Accountants, and forms part of the company's 24th Integrated Annual Report. The BRSR presents the company's performance against the nine principles of the National Guidelines on Responsible Business Conduct (NGRBC) and SEBI's BRSR framework, covering environmental stewardship, social responsibility, and governance.

Business Overview and Operations

Krishna Institute of Medical Sciences operates in the hospital and medical care segment, which accounts for 96.78% of its turnover. The company offers comprehensive healthcare services across 40 specialties, including cardiac sciences, oncology, neurosciences, gastric sciences, orthopedics, organ transplantation, renal sciences, and mother & child care. As of the reporting period, the company operates 6 hospitals nationally across 3 states, with no international operations. Exports contributed 1.67% to total turnover. The company reported a turnover of ₹17,013.77 Million and a net worth of ₹24,283.69 Million, making it subject to CSR obligations under Section 135 of the Companies Act, 2013.

The company's subsidiary and associate structure as disclosed in the BRSR is summarised below:

Environmental Performance

The BRSR discloses detailed environmental metrics for FY 2025-26, independently assured by M/s. Brahmayya & Co. Key energy, water, and emissions data are presented below:

Air emission parameters disclosed for FY 2025-26 include NOx at 28.66 µg/m³, SOx at 25.97 µg/m³, and Particulate Matter (PM) at 41.78 µg/m³. The company has implemented a Zero Liquid Discharge (ZLD) system, with treated sewage reused for toilet flushing, cooling systems, and landscaping across multiple facilities. Scope 3 emissions were not measured during the reporting year, with the company noting that efforts are ongoing to track and record this data.

Workforce and Social Disclosures

The BRSR provides detailed workforce data, including employee well-being, safety, and human rights metrics. The cost incurred on wellbeing measures as a percentage of total revenue was 0.13% in FY 2025-26, compared to 0.16% in FY 2024-25. No lost-time injuries, fatalities, or high-consequence work-related injuries were recorded for either employees or workers in FY 2025-26 or FY 2024-25.

Board gender diversity stood at 22.2% female representation (2 out of 9 directors), while 50% of Key Managerial Personnel are female (1 out of 2). No disciplinary actions for bribery or corruption were recorded against any directors, KMPs, employees, or workers in FY 2025-26 or FY 2024-25.

Governance and Transparency

The company reported accounts payable days of 124.40 in FY 2025-26, compared to 125.29 in FY 2024-25. Purchases from trading houses as a percentage of total purchases rose to 74.23% in FY 2025-26 from 67% in FY 2024-25, with the number of trading houses increasing from 890 to 1,465. Purchases from the top 10 trading houses as a percentage of total trading house purchases stood at 30.83%, up from 24.00%.

No penalties, fines, or compounding fees were paid to any regulatory, law enforcement, or judicial authority during FY 2025-26. No complaints related to conflict of interest involving directors or KMPs were received in either the current or previous reporting year.

CSR and Community Initiatives

The company undertook a range of CSR projects at the group level during the reporting period, benefiting diverse stakeholder groups across education, healthcare, and skill development. Notable initiatives included health camps reaching 81,258 beneficiaries, cancer screening camps covering 16,500 individuals, and skill development programmes through partnerships such as KFRC-Tech Mahindra Foundation in Secunderabad (319 beneficiaries) and Vizag (205 beneficiaries). Job creation was concentrated in metropolitan areas, accounting for 76.68% of total wage cost in FY 2025-26, compared to 71.37% in FY 2024-25. Sourcing from within the district and neighbouring districts stood at 91.18% in FY 2025-26, marginally lower than 91.81% in FY 2024-25.

The BRSR, along with the Independent Practitioner's Reasonable Assurance Report, is available on the company's website at https://www.kimshospitals.com/investors/ under Regulation 46 of SEBI (LODR) Regulations, 2015.

Krishna Institute of Medical Sciences Limited reported a 28.2% year-on-year increase in consolidated revenue to ₹39,308 million for FY26, offset by a 41.7% decline in profit after tax (PAT) to ₹2,420 million. The earnings contraction stems from significant initial gestation costs associated with aggressive network expansion across new geographies, including simultaneous launches in Mumbai and Bengaluru. Despite the dip in profitability, operational volumes remained robust, with inpatient (IP) and outpatient (OP) volumes growing by 15.4% and 25.4% respectively.

The filing, submitted pursuant to Regulation 34(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, highlights that EBITDA grew modestly by 1.6% to ₹8,282 million, resulting in a group EBITDA margin of 21.1%. Management attributes the temporary strain on profitability to the ramp-up phase of newly commissioned facilities, viewing these investments as necessary precursors to long-term shareholder value creation. The company also raised ₹1,500 crore through an oversubscribed Qualified Institutional Placement (QIP), with ₹1,100 crore already utilized for debt reduction.

Operational Performance and Expansion

The healthcare group expanded its footprint significantly during FY26, launching units in Mumbai, Bengaluru, Sangli, Kollam, and Guntur, alongside subsequent openings in Kompally and Palakkad. This expansion contributed to a total bed capacity of 6,464, of which 4,852 were operational. Occupancy across operational beds remained stable at 50.5%. Average revenue per occupied bed (ARPOB) increased by 14.0% to ₹44,644, supported by higher specialty intensity and improved payor mix. Average length of stay (ALOS) improved to 3.57 days from 3.66 days in FY25.

Cluster-Wise Performance

Mature clusters in Telangana and Andhra Pradesh delivered stable operating performance. The Telangana cluster generated EBITDA of ₹6,820 million on revenue of ₹22,420 million, while Andhra Pradesh reported EBITDA of ₹2,337 million on revenue of ₹9,496 million. In contrast, newer markets are in early operating cycles. The Maharashtra cluster, comprising Nagpur, Nashik, and Thane, reached EBITDA breakeven as occupancy improved to 52.1% from 33.0% in FY25. Karnataka operations are expected to achieve EBITDA positivity by late 2026 and early 2027.

What the Numbers Show

A notable divergence exists between top-line growth and bottom-line performance. While revenue surged nearly 28%, PAT fell by over 40%, indicating that margin compression is currently absorbing the benefits of volume growth. Finance costs more than doubled to ₹2,025 million from ₹903 million in FY25, reflecting increased leverage ahead of the QIP proceeds deployment. Additionally, depreciation and amortization expenses rose sharply to ₹2,832 million from ₹1,772 million, underscoring the capital-intensive nature of the recent expansion. The company’s strategy relies on occupancy ramp-up in new hospitals to drive future margin recovery.

Strategic Initiatives and Governance

Beyond financial metrics, the company highlighted advancements in clinical technology, including the introduction of the region’s first US-based Medtronic Spine Robot and AI-driven Early Warning Systems. Academically, KIMS achieved recognition for completing over 10,000 brain tumour surgeries. On the governance front, the Board approved a preferential allotment of ₹600 crore to promoters, with 25% infused initially and the balance within 18 months. The company did not declare a dividend for FY26, prioritizing capital allocation for expansion and debt reduction.