Detailed Narrative
Robust H1 FY26 Financial Performance
Chandan Healthcare reported strong financial results for H1 FY26, with total sales reaching ₹137.49 crores, marking a 23.38% year-on-year growth. EBITDA for the period stood at ₹29.98 crores, a significant 43.98% increase year-on-year, with EBITDA margins expanding by 312 basis points to 21.81%. Net Profit after Tax (PAT) also saw substantial growth, rising by 46.59% year-on-year to ₹15.6 crores, and PAT margins improved by 180 basis points to 11.35%.
Aggressive Pan-India Network Expansion
The company is executing an aggressive expansion strategy, having successfully opened six new comprehensive diagnostic centers in H1 FY26 across locations like Patna, Lucknow, Ayodhya, Lakhimpur, Delhi, and Bhopal. Plans are in place to open a center in Jaipur next month and a super-specialty lab in Jankipuram, Lucknow, within the next six months. The goal is to establish 20 comprehensive diagnostic centers and 40 labs in 7 states within the next six months, and a total of 100 labs within the next 2.5 to 3 years. This expansion includes a network of 100 new strategically located collection and processing laboratories and over 1,000 new franchise collection points across 17 states.
Strategic Partnership with Jeena Sikho
Chandan Healthcare has entered into an exclusive five-year partnership with Jeena Sikho, an Ayurvedic company with 50 hospitals and over 100 clinics across 17 states. This collaboration will provide diagnostic services to Jeena Sikho's patients, with collections already started in 34 units. The financial model involves a 30% discount to patients, 20% payment to Jeena Sikho, and Chandan retaining 50%, on which it expects a handsome 80% margin due to reduced overheads. This partnership is projected to add ₹25-50 crores in annual revenue and contribute to sales and profits from the next quarter.
Focus on Profitability and Margin Expansion
Management is committed to maintaining strong profitability, targeting a consolidated EBITDA margin of 35% by the end of FY26. The diagnostic business currently boasts an EBITDA margin of 34.22%. The pharmacy segment, which recorded a 5.2% EBITDA margin in H1 FY26 (up from 1.2% last year), aims to achieve over 10% EBITDA within the next six months. The company also targets a net profit and EBITDA growth rate of more than 20-25% consistently.
Capital Allocation for Growth
The company plans a total investment of approximately ₹100 crores for its expansion, covering 100 new labs and 8-9 major comprehensive centers. Individual labs inside the Jeena Sikho network require about ₹30 lakhs, while those outside cost around ₹50 lakhs due to additional renovation and security expenses. To fund these ambitious projects and enhance shareholder value, Chandan Healthcare is issuing ₹104 crores in preferential shares, with strategic investors and promoters contributing. Management stated they have sufficient funds for the next 2.5 years of planned expansion without needing additional debt or equity.
Future Outlook and IPO Plans
Chandan Healthcare is also investing in next-generation diagnostics, including a dedicated molecular genome lab at its Delhi facility. The company has secured properties for major processing laboratories in Mumbai, Chandigarh, and Calcutta to serve as regional hubs. Looking ahead, Chandan aims for an Initial Public Offering (IPO) in April 2027, with pre-IPO activities planned for FY27-FY28. Additionally, the company has a 250-bed MOU for a hospital in Gorakhpur, with plans to add 250 more beds in two years, targeting 90% occupancy by the time of the IPO.