Case 062Commercial and market casesCore

Business intuition: a 40-clinic veterinary chain where clinics take 18 months to mature. Which KPI should the sponsor track first, and what does each clinic add to value at 15x?

Bain CapitalSan Francisco · 2025

The situation

Tvisha Pet Care runs 40 veterinary clinics in three cities. A mature clinic earns Rs 1.5 crore of revenue a year, built from about 2,500 active pets making 3 visits a year at Rs 2,000 a visit, and a 25% clinic margin after vets, rent and consumables. A new clinic takes 18 months to reach that level. 25 clinics are mature and 15 opened in the last 18 months and are on average halfway up the ramp.

A growth fund has agreed a 15x EBITDA valuation and wants a view on what to watch after closing. No accounting, the interviewer says; tell me how the business works.

Your task

Which single KPI should the sponsor track first and why, and what does one more clinic add to the chain's value at 15x?

Quick check

The sponsor can see one number a week. Which one tells it most about where EBITDA is going?

Worked solution

Try it on paper, then open one step at a time.

30-second answerThe answer to give first

Track active pets per clinic by months since opening, against the ramp curve the mature clinics followed; and each mature clinic adds about Rs 5.6 crore of value at 15x. A mature clinic earns Rs 1.5 crore and Rs 0.375 crore of EBITDA, so 15x is Rs 5.62 crore. The chain earns about Rs 12.2 crore today, worth Rs 183 crore, and Rs 15 crore once the 15 ramping clinics mature, worth Rs 225 crore. Whether that Rs 42 crore arrives is decided by pet counts long before the P&L shows it.

Step 1How do you take a business apart into the numbers that drive it?

Draw the tree from value down to the thing a clinic manager can change. Think of a neighbourhood gym: the owner knows that members, visits and the monthly fee decide revenue long before the accountant does. Chain value is clinics times EBITDA per clinic times the multiple; EBITDA per clinic is revenue times margin; revenue per clinic is active pets times visits times spend per visit. Every box above the bottom row is arithmetic on the row below, so the sponsor's attention should go to the bottom. Active petsPets that have visited the clinic at least once in the last twelve months. The clinic equivalent of active customers. is the one that moves first.

Tvisha's value at 15x breaks down into clinics, EBITDA per clinic and the multiple; EBITDA per clinic into Rs 1.5 crore of revenue and a 25% margin; and revenue into 2,500 active pets, 3 visits a year and Rs 2,000 a visit, so the leading KPI is active pets per clinic by month since opening, which decides a new clinic's revenue months before the P&L records it.

Step 2Why pets by month since opening, rather than revenue or margin?

Because of the 18-month lag. Chain revenue and margin describe the 25 mature clinics; the 15 ramping clinics will decide the next Rs 2.8 crore of EBITDA, and the only early evidence of how they will do is whether their pet counts are tracking the curve the mature ones followed. A clinic at month 6 with 1,125 pets is on plan; one with 800 is not, and no amount of margin discipline fixes a clinic without patients. Revenue follows pets with a lag of a visit cycle, and margin follows revenue because vets and rent are fixed.

Months open	Share of mature pets	Active pets	Revenue run-rate, Rs crore
3	20%	500	0.30
6	45%	1,125	0.68
9	65%	1,625	0.98
12	80%	2,000	1.20
15	92%	2,300	1.38
18	100%	2,500	1.50

The ramp curve a mature Tvisha clinic followed: 20% of its 2,500 pets by month 3, 80% by month 12 and the full base by month 18, so a new clinic can be judged against this line every month rather than waiting a year and a half for its P&L.

Step 3What is one more clinic worth, and what does that say about the plan?

Price the unit. A mature clinic earns Rs 0.375 crore of EBITDA, which at 15x is Rs 5.62 crore of value; if a clinic costs about Rs 2 crore to open and reaches maturity, each opening creates roughly Rs 3.6 crore. That is why the fund paid 15x: the multiple is high for the clinics that exist, but the clinics that can be opened earn far more than they cost. The same arithmetic warns you: a clinic that stalls at 1,500 pets earns Rs 0.225 crore, worth Rs 3.4 crore, barely above its cost.

Step 4What would you put in the board pack, and what would you leave out?

One chart: active pets by month since opening for every clinic under 18 months old, plotted against the mature curve. Clinics above the line are the growth plan working; clinics below it are where the operating partner goes next week, and the chart says which before the quarterly numbers do. Leave out chain revenue, which the finance team already reports, and leave out spend per visit, which moves slowly and tempts managers to push unnecessary treatments. The limitation to state: the ramp curve is an average, and a clinic in a new city may follow a slower line for reasons that have nothing to do with management.

Where candidates lose it

The usual loss is naming a lagging number, chain revenue or EBITDA margin, and calling it the KPI. By the time a ramping clinic shows up in revenue the fund has lost a year; the interviewer is testing whether you can find the number that moves first.

The second is valuing a clinic at 15x its first-year EBITDA. A clinic halfway up the ramp earns half its mature EBITDA, and its value is set by where it will be at month 18, which is exactly why the pet count matters.

What the interviewer asks next

Visits per pet fall from 3 to 2.5 across the chain. What happens to EBITDA per clinic and to the value of the chain?
Management wants to open 20 clinics next year. What does the ramp table say the cash need is?
A rival chain opens next to three of the ramping clinics. Which KPI shows the damage first?
How would you set management's bonus using this tree?

Asked at Bain Capital, Private Equity, San Francisco, 2025 (Wall Street Oasis): 3 more cases which involved different companies and testing business intuition

Company names and figures are illustrative.