Nephrocare Health Services Ltd

Polar Capital HC Opportunities Fund

• Target: Nephrocare Health Services Ltd; Pre-acquisition VR: 5,058,988 shares (5.042%).
• Disclosing Party: Polar Capital Funds PLC – Healthcare Opportunities Fund; acquired 2,545,719 VR (2.532%).
• Mode: Off-market; date: 24/09/2026; post-hold: 8,326,681 VR (8.280%).
• Total equity capital before/after: 100,559,014 shares.

Polar Capital Emerging Markets Healthcare Fund

• Target: Nephrocare Health Services Ltd; Pre-acquisition VR: 9,240 shares (0.009%).
• Disclosing Party: Polar Capital Funds PLC – Emerging Markets Healthcare Fund; acquired 573 VR (0.001%).
• Mode: Off-market; date: 24/09/2026; post-hold: 13,716 VR (0.017%).
• Total equity capital before/after: 100,559,014 shares.

Polar Capital Healthcare Discovery Fund

• Target: Nephrocare Health Services Ltd; Pre-acquisition VR: 6,028 shares (0.006%).
• Disclosing Party: Polar Capital Funds PLC – Healthcare Discovery Fund; acquired 3,186 VR (0.003%).
• Mode: Off-market; date: 24/09/2026; post-hold: 17,480 VR (0.014%).
• Total equity capital before/after: 100,559,014 shares.

Nephrocare Health Services Limited - Trading window closed from October 01, 2026; remains closed until 48 hours after the declaration of the unaudited financial results for the quarter and half year ended September 30, 2026.

Meeting Details

• Date and time: September 29, 2026, 01:00 PM IST.
• Nature: Group meetings, physical at Trident BKC, Mumbai.
• Organizer: PL Capital.
• Place: Trident BKC, Mumbai.

Participants

• Company officials/management representatives to attend.

Purpose

• Investor conference discussions based on publicly available information.

Additional Notes

• Discussions will be based on publicly available information; no UPSI.

Rating Action

• Long-term bank loan facilities upgraded to IND AA-/Stable; short-term rating affirmed at IND A1+.

Instruments Rated

• Bank loan facilities – Long-term: IND AA-/Stable (INR 2,262.27 million).
• Bank loan facilities – Short-term: IND A1+ (INR 506.63 million); rating affirmed.

Rationale (Key Drivers)

• Upgraded on stronger business, profitability, and liquidity post-December 2025 equity raise.
• Leading organised dialysis provider with diversified formats and expanding international operations.
• Improved liquidity; net cash position at FYE26; modest debt repayments; healthy cash generation.
• Working-capital intensity and execution risks in newer international markets remain monitorable.
• Forex and geopolitical risks mitigated by geographic diversification.

Outlook & Sensitivities

• Outlook Stable; supported by healthy profitability and liquidity.
• Positive drivers: scale, profitability, and diversification; Negative: sustained leverage >1.0x.

Material Changes Since Last Rating

• Long-term rating upgraded from IND A+ to IND AA-; outlook from Positive to Stable.
• Short-term rating reaffirmed at IND A1+.

Restructuring of Philippine subsidiaries

• Board approved rationalisation and consolidation of Philippine subsidiaries on Sep 18, 2026.
• Phased implementation subject to applicable laws and approvals in India and the Philippines.
• Aim to simplify structure, improve operational, administrative, and compliance efficiencies, and strengthen governance.
• Accounting treatment: common-control transaction under applicable framework.
• No change in shareholding pattern or ultimate ownership; Nephrocare PH remains a subsidiary.
• Internal reorganisation; no specific promoter benefit.
• Annexure A contains details; further disclosures to follow as required.

Parties

• Purchaser: Nephrocare Health Care Services, Philippines Inc. (overseas step-down subsidiary); Seller: Renal One Dialysis Corp.

Purpose

• Acquisition of dialysis center assets in Bulacan, Philippines under an Asset Transfer Agreement.

Key terms

• Total consideration PHP 67,200,000; approx INR 10.25 crore; no share issuance; no special rights.

Related party status

• Purchaser is overseas step-down wholly owned subsidiary; Seller not related; transaction not a related party transaction.

Impact

• Expands group asset base via Philippines subsidiary; no immediate disclosed balance-sheet impact.

Other disclosures

• Regulatory approvals not specified; no board/management changes disclosed; termination/amendment not applicable.

Termination/amendment

• Not Applicable.

ESOP grant details

• NRC approves grant of 4,01,362 ESOPs under NephroPlus Employee Stock Option Scheme 2026.
• Each option entitles one fully paid share of ₹2 on vesting.
• Options granted at ₹230 exercise price per option.
• Aggregate grant approved on Sep 3, 2026; minimum vesting period one year.
• Vesting subject to applicable conditions and letters; unvested options lapse if conditions unmet.
• Exercisable within five years from vesting, subject to NRC terms and grant letters.
• Scheme complies with SEBI SBEB Regulations 2021.
• No options exercised yet; no proceeds realized at this stage.
• Details in Annexure I; information also posted on the company website.

Tax Assessment Update

• Order imposes net tax of ₹11.50 crore and a ₹3.29 crore penalty, totaling ₹14.79 crore (excluding interest).
• Discrepancy in revenue data used to determine exemption by the tax department versus MOH/audited records.
• NCA expects the order to be set aside; reconciling data and pursuing legal remedies including appeal.

Financial Performance

• Revenue: INR 282 crores in Q1 FY27; up 23.7% YoY
• Adjusted EBITDA: INR 65.1 crores; margin 23.1% (YoY expansion)
• Adjusted PAT: INR 37 crores; margin 13.1%
• Active guests: 38,262; up 13% YoY
• Treatments: 10.3 lakh; up 13.3% YoY
• Revenue per treatment: INR 2,733; up 9.2%
• Capex in Q1: INR 44 crores
• IPO proceeds utilized: 68% (~INR 207 crores)
• Annualized ROCE: 21%
• International revenue share: 45% of total revenue
• Clinics: 550 across 5 countries; 307 Indian cities in 25 states
• Philippines: 50 clinics across 39 cities; 7 clinics added this quarter
• New clinics added this quarter: 26 (19 India, 7 Philippines)

Operations & Growth

• International operations contribute ~45% of revenue
• Kazakhstan subsidiary incorporated to evaluate Central Asia opportunities
• Saudi Arabia: first clinic at Riyadh Hospital operational in July; home dialysis started
• MOH tender RFI response submitted; optimistic about tender timelines
• Philippines expansion: 7 clinics added; total 50 clinics across 39 cities
• India model remains core platform; India clinics continue scale-up

Balance Sheet & Cash Flow

• IPO proceeds utilization: 68% (~INR 207 crores) as of Jun 2026
• Q1 capex: INR 44 crores toward center acquisitions and growth

Projects and Capex

• Capex guidance in the quarter: 44 crores; strategic capex for center acquisitions
• India: target 40-50 clinics opened per year; Philippines: 10-15 clinics per year; new international market every 12-18 months
• Kazakhstan subsidiary created; Saudi clinic network being built in investment phase
• NIDA (NephroPlus International Dialysis Academy) to train first batch in Q3
• AI initiatives: reform.ai for process compliance; NephroPlus index; data-driven improvements

Outlook & Guidance

• Medium-term growth guidance of 15% to 20% over next 3-5 years maintained
• Growth levers: same-center growth, footprint expansion, selective new markets incl. PPP

Q&A Highlights

• Margin improvement driven by mix and COGS efficiency; EBITDA margin up 125 bps; COGS as % of revenue down 175 bps
• Center utilization assessed at clinic level; micro-level optimization; 13% capacity growth from 50 new centers
• AI initiatives: data interpretation via NephroPlus index; forecasting tools in future; reform.ai for live auditing
• Forex impact: around INR 20 lakh favorable in this quarter
• Depreciation: flat as % of revenue; machines depreciated 7–10 years by country; RFID tracking improving utilization
• Saudi tender timelines uncertain; investments to be scaled if tender terms favorable

Parties

• Purchaser: Nephrocare Health Care Services, Philippines Inc., overseas step-down wholly owned subsidiary of Nephrocare Health Services Ltd.
• Seller: Assumption Dialysis Center.

Purpose

• Acquisition of dialysis center assets via Asset Transfer Agreement for Daang Maharlika, Abuyog, Leyte, Philippines.

Key terms

• Total consideration PhP 75,000,000.
• ATA dated Aug 14, 2026; executed Aug 17, 2026.
• No special rights; no share issuance; no governance changes.
• Purchaser is overseas subsidiary; Seller not related; transaction not related party.

Related party status

• Not a related party transaction; Purchaser is a subsidiary; Seller not related.

Impact

• Acquisition expands asset base in Philippines with PhP 75,000,000 investment.

Other disclosures

• Annexure I attached; confirms parties, purpose, size; related-party details disclosed; no shares or loans.