Chandan Healthca — Q2 FY26 earnings call

Call held 17 Nov 2025

Management summary

Chandan Healthcare reported robust H1 FY26 results, driven by strong growth in revenue, EBITDA, and PAT, alongside significant margin expansion. The company is aggressively expanding its diagnostic network across India through new comprehensive centers, labs, and a franchise model, bolstered by a strategic partnership with Jeena Sikho and a preferential share issue. Management is confident in maintaining strong growth and profitability while navigating increased competition in the expanded franchise network.

Highlights

  • Total sales grew 23.38% YoY to ₹137.49 crores in H1 FY26.

  • EBITDA increased by 43.98% YoY to ₹29.98 crores, with margins expanding by 312 bps to 21.81%.

  • PAT rose by 46.59% YoY to ₹15.6 crores, and PAT margins improved by 180 bps to 11.35%.

  • Successfully operationalized six new comprehensive diagnostic centers and plans for 20 centers and 40 labs in 7 states within the next 6 months.

  • Secured a 5-year exclusive partnership with Jeena Sikho, projected to add ₹25-50 crores in annual revenue with high margins.

Concerns

  • The shift to a franchise model introduces competition from larger players, which management acknowledges.

  • Capital investment for labs outside the Jeena Sikho network is higher (₹50 lakhs vs. ₹30 lakhs inside), impacting initial profitability.

Key financials

  1. Total Sales ₹137.49 Cr +23.4%YoY
  2. EBITDA ₹29.98 Cr +44%YoY
  3. EBITDA Margin 21.8%
  4. PAT ₹15.6 Cr +46.6%YoY
  5. PAT Margin 11.3%

What they filed

Q1 FY27: revenue up 19.1%, net profit up 27.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue110 55 63 68 68 −38%65 +19%76 +21%81 +19%
EBITDA20 9 10 14 14 −29%12 +33%11 +12%20 +41%
Net profit11 4 6 6 8 −29%5 +8%5 −18%8 +28%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹137.63 Cr Total
  • Diagnosis ₹77.63 Cr 56.4%
  • Pharmacy ₹60 Cr 43.6%

Capital allocation

high confidence
  • Capex ₹100 Cr
    • 100 new labs ₹50 Cr
    • 8-9 major comprehensive centers ₹50 Cr
    • Lab inside Jeena Sikho hospital ₹30 lakh
    • Lab outside Jeena Sikho hospital (including renovation/security) ₹50 lakh
    • Instruments for labs ₹30 lakh
    I tell you around 100 labs will have around Rs. 50 crores. And in the meantime, this Rs. 50 crores will be invested in these 100 labs. And definitely we will try to have any strategic acquisition if we get, we will do. And we are going for so many contracts in B2G business. That money will be utilized in that. And we will have at least 8-9 comprehensive major centers in 9 states which can give all type of services under one roof. Altogether we will have an investment of around Rs. 100 crores.
  • M&A Patna center Acquisition · Closed

    Expansion of diagnostic network

    And the first was Patna in Bihar. We acquired Patna center in the month of April.
  • Liquidity Liquidity disclosed Company expects to have enough money for next 2.5 years for planned expansion without additional debt or equity, partly funded by ₹104 crore preferential shares.
    At the moment, it is not looking like because we will have enough money for next 2.5 years. I don't believe, if we get any big opportunity in acquiring a lab or something, that may be. But as far as our program is concerned, for 100 labs and 8-9 major centers, I don't believe we need any money in next 2 years.

Guidance & targets

Capacity

  • Comprehensive Diagnostic Centers & Labs Capacity · within next 6 months · High confidence 20 comprehensive diagnostic centers and 40 labs
    With this, we will have 20 comprehensive diagnostic centers and 40 labs in 7 states. And this number is increasing with each passing days. It is just the beginning for Chandan Healthcare. And we are ready to move much faster in the years to come.

    — Amar Singh, Chairman and Managing Director

  • New collection and processing laboratories Capacity · across 17 states · High confidence 100 new strategically located collections and processing laboratories
    We are establishing a network of 100 new strategically located collections and processing laboratories to increase our core infrastructure in 17 states.

    — Amar Singh, Chairman and Managing Director

  • New franchise collection points Capacity · across 17 states · High confidence more than 1,000 new franchise collection points
    And in case of franchise growth, we are launching more than 1,000 new franchise collection points to dramatically extend our reach into Tier 1, Tier 2, and Tier 3 cities of 17 states.

    — Amar Singh, Chairman and Managing Director

  • Total labs Capacity · next 3 years · High confidence 100 labs
    So, our target of 100 labs in next 3 years will be completed.

    — Amar Singh, Chairman and Managing Director

  • Gorakhpur Hospital Beds Capacity · in 2 years · High confidence 250 beds
    We have a 250-bed MOU in Gorakhpur. They will build a building and give it to us in a year. After that, we will do it for another year. In 2 years, we will have 250 more beds in Gorakhpur.

    — Amar Singh, Chairman and Managing Director

Expansion

  • States targeted for expansion Expansion · High confidence 15 states
    Our commitment to reaching underserved populations and establishing a dominant national presence remains unwavering. We are launching an ambitious expansion plan targeting 15 states across India.

    — Amar Singh, Chairman and Managing Director

Funding

  • Preferential shares issuance Funding · High confidence Rs. 104 crore
    We are coming out Rs. 104 crore preferential shares to accomplish this ambitious project and increase the shareholder value.

    — Amar Singh, Chairman and Managing Director

Profitability

  • Pharmacy EBITDA Profitability · next 6 months or so · High confidence over 10%

    From 1.2% (last year), 5.2% (H1 FY26) today

    And our aim is to achieve nearly over 10% EBITDA in next 6 months or so.

    — Amar Singh, Chairman and Managing Director

  • Net Profit Growth Profitability · High confidence more than 20%-25%
    But usually, our net profit growth will definitely be more than 20%-25%.

    — Amar Singh, Chairman and Managing Director

  • EBITDA Growth Profitability · High confidence more than 20%-25%
    And we always aim for our net profit and EBITDA growth, which should never come down from 20%-25%.

    — Amar Singh, Chairman and Managing Director

  • Consolidated EBITDA Margin Profitability · by end of FY26 · High confidence 35%

    From 21.81% (H1 FY26) today

    And as far as target is concerned, our target is only 35%.

    — Amar Singh, Chairman and Managing Director

Revenue Mix

  • Diagnostic to Pharmacy Revenue Ratio Revenue Mix · tomorrow · Medium confidence 65:35

    From 60:40 (current) today

    Today, it is 60-40. Tomorrow, it will be 65-35. And lastly, it will be 80-20 and that will continue.

    — Amar Singh, Chairman and Managing Director

  • Diagnostic to Pharmacy Revenue Ratio Revenue Mix · next 3 years · Medium confidence 80:20

    From 60:40 (current) today

    For 80-20, it will happen only in next 3 years. Gradually and gradually, diagnostic business will exceed.

    — Amar Singh, Chairman and Managing Director

Revenue

  • Jeena Sikho JV Annual Revenue Revenue · a year · Medium confidence Rs. 25 crores to Rs. 50 crores
    We are expecting more than at least Rs. 25 crores to Rs. 50 crores a year.

    — Amar Singh, Chairman and Managing Director

IPO

  • IPO timeline IPO · April 2027 · High confidence April 2027
    And as far as IPO is concerned, we are going for IPO in April 2027, because this company is already profitable for the last 6 years.

    — Amar Singh, Chairman and Managing Director

  • Pre-IPO timeline IPO · FY'27-'28 · High confidence FY'27-'28
    So, we are going for pre-IPO in FY'27-'28 and then IPO.

    — Amar Singh, Chairman and Managing Director

Hospital

  • Hospital Occupancy Hospital · by IPO in FY'27 · High confidence 90%
    And when we fully utilize these 600 beds and reach IPO in FY'27, it will be running at 90% occupancy.

    — Amar Singh, Chairman and Managing Director

What to watch in Q3 FY26

Jeena Sikho JV Revenue Contribution

Next quarter
Current Started collection in 34 units, expected to add to sales/profits from next quarter.
Target Initial contribution towards ₹25-50 crores annual revenue.

Why it matters

This is a significant new revenue stream and a key validation of the company's pan-India expansion strategy.

And this contract is exclusively for the next five years with us. It will start adding in our sales and profits from next quarter. We are expecting more than at least Rs. 25 crores to Rs. 50 crores a year.

Risks & concerns

  • Increased competition in franchise model

    medium

    The shift to a franchise model will bring competition from large players like Metropolis, Dr. Lal, Thyrocare, which Chandan previously avoided.

    Management acknowledged

  • Higher capital investment for labs outside partner network

    low

    Labs established outside the Jeena Sikho network require higher CAPEX (₹50 lakhs vs ₹30 lakhs inside) due to rental and security costs.

    Management acknowledged

Q&A highlights

8 direct
Predictability and recurring nature of revenue Direct
Till date, our patients were coming to our centers and all the patients were referring patients till date. And from now onwards, we are going for franchise business also. It's a recurring business.

Clarifies the underlying business model and revenue stability, especially with the new franchise push.

Asked by Shyam

Segment-wise margins and average ticket size Direct
More or less, each segment has the same margins. Because the whole diagnostic business has set up like this. The margins are nearly the same in case of B2C, B2B, B2G and franchise, more or less, the margins are same. Consolidated, it is around Rs. 650. That includes pathology and everything. And it is a bit higher in case of corporate business. Average, it is Rs. 650 per patient.

Provides insight into the profitability structure across different customer segments and the average revenue per patient.

Asked by Shyam

Details of Jeena Sikho partnership and associated margins Direct
Our contract is we have to do the test at the rate of what that city carries on an average... giving 30% discount to Jeena Sikho patients. And we are paying 20% to Jeena Sikho. And rest of the 50% we are retaining. And out of the 50%, we have a very handsome 80% margin.

Reveals the financial mechanics and high profitability of the new strategic partnership, highlighting a key growth driver.

Asked by Rahul

Pharmacy business profitability and future targets Direct
This year, this first half, we have achieved 5.2% EBITDA in case of pharmacy. And it was hardly 1.2% last year. And our aim is to achieve nearly over 10% EBITDA in next 6 months or so.

Indicates a significant improvement in the pharmacy segment's profitability and sets a clear short-term target for margin expansion.

Asked by Rahul

Future revenue mix between diagnostic and pharmacy segments Direct
Today, it is 60-40. Tomorrow, it will be 65-35. And lastly, it will be 80-20 and that will continue. For 80-20, it will happen only in next 3 years. Gradually and gradually, diagnostic business will exceed.

Outlines the strategic shift towards a higher proportion of diagnostic revenue, which is generally higher margin.

Asked by Satish

Impact of franchise model on margins and competition Direct
No, sir. Margin will not go down. It will be either same or maybe higher. But the only thing is, whenever we go for franchise system, we will have competition with large players like Metropolis, Dr. Lal, Thyrocare.

Addresses a key concern regarding the new franchise strategy and management's confidence in maintaining profitability despite increased competition.

Asked by Prasenjit

Total CAPEX for the planned 100 labs and major centers Direct
I tell you around 100 labs will have around Rs. 50 crores. And in the meantime, this Rs. 50 crores will be invested in these 100 labs. Altogether we will have an investment of around Rs. 100 crores.

Provides clarity on the significant capital outlay required for the ambitious expansion plans and how it will be distributed.

Asked by Prasenjit

Drivers for EBITDA margin increase and future targets Direct
our EBITDA margin in diagnostic is already 34.22%. And the consolidated EBITDA is around 21.81 but the diagnostic business is already having 34.22 EBITDA margin. And as far as target is concerned, our target is only 35%.

Explains the current margin profile and the ambitious target for consolidated EBITDA margin, indicating confidence in operational efficiency.

Asked by Charchit

3 min read 6 chapters

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.

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