Chandan Healthca — Q3 FY26 earnings call

Call held 16 Feb 2026

Management summary

Chandan Healthcare Limited reported a strong Q3 FY26 with revenue growing 20% YoY to ₹65.77 crores and EBITDA up 39% YoY to ₹12.61 crores, driven by robust B2C diagnostic sales. EBITDA margins expanded significantly to 19.17%. However, PAT margin saw a slight dip to 6.9% due to a one-time gratuity provision. The company is aggressively expanding its network of labs and comprehensive centers, with plans for specialized diagnostics and a major government project, and expects higher growth and improved margins in the coming periods.

Highlights

  • Revenue grew 20% YoY to ₹65.77 crores, demonstrating strong top-line performance.

  • EBITDA increased significantly by 39% YoY to ₹12.61 crores, indicating operational efficiency.

  • EBITDA margin expanded by 263 basis points to 19.17%, reflecting improved profitability.

  • B2C diagnostic sales showed robust growth of 34% YoY, highlighting strong direct customer engagement.

  • PAT increased by 7.97% YoY to ₹4.54 crores, despite a one-time provision for gratuity.

Concerns

  • PAT margin declined by 7 basis points to 6.9% due to a one-time exceptional provision of ₹2.2 crores for gratuity.

  • Employee costs are increasing rapidly (18% of revenues) due to aggressive expansion and advance hiring, which temporarily impacts margins.

Key financials

  1. Revenue ₹65.77 Cr +20%YoY
  2. EBITDA ₹12.61 Cr +39%YoY
  3. EBITDA Margin 19.2% +2.6%YoY
  4. PAT ₹4.54 Cr +8%YoY
  5. PAT Margin 6.9% -0.07%YoY
  6. One-time Gratuity Provision ₹2.2 Cr

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

  • Diagnostic (B2C Sales)
    34% YoY Growth
  • Revenue Mix (Diagnostic:Pharmacy)
    60% Diagnostic Share40% Pharmacy Share
  • Revenue Mix (Radiology:Pathology)
    75% Radiology Share25% Pathology Share
  • EBITDA Margin (B2C)
    45% Margin
  • EBITDA Margin (B2G)
    30% Margin
  • EBITDA Margin (B2B/Franchisee)
    35% Margin

Capital allocation

high confidence
  • Capex Capex disclosed
    • Investment in new labs ₹100 Cr
    • Per laboratory investment ₹1 Cr
    Sir, for franchisee, we don't need to invest anything. Actually, we have to invest in our labs only. And we are planning to start 100 labs in three years. And already in this year, we have already started more than 13 labs, and next year also we are going to start more than 13 labs and few comprehensive centres which has all pathological and radiological services. ... And for that, we are planning to invest nearly INR100 crores in three years. ... And whenever we start a lab, actually to prepare a setup, we have to invest nearly INR50 lakhs to INR75 lakhs depending on the size of the place. And besides this, we have to invest nearly INR50 lakhs more. That simply means for each laboratory we are investing nearly INR1 crore.
  • Liquidity Liquidity disclosed The company raised ₹104 crores through preferential shares, with ₹26 crores already received, providing sufficient funds for ongoing investments and expansion. Working capital is improving quarter-to-quarter, leading to positive net cash inflow from operating activities this year.
    And for that matter, we have already gone for preferential shares of INR104 crores. So we are having money, and we are regularly investing, and lot of investment we have already done in this year, and in next two years also we will continue to expand. ... Yes sir, it is improving quarter-to-quarter. So we had not so good working capital in March last year, but we are improving it on q33uarterly basis. ... Yes, we are positive. ... And we have got preferential shares also for INR104 crores, and we have already received INR26 crores, 25% in this month, and it -- the warrants were fully subscribed, and we are expecting, in next one year, we will get rest of the money and expansion will go smoothly.

Guidance & targets

Network Expansion

  • Franchisee diagnostic centers Network Expansion · next three years · High confidence 1,000
    This strategic growth will have a strong foundation for our future plans because our future belongs to 1,000 franchisee in next three years.

    — Amar Singh, Chairman and Managing Director

  • Labs Network Expansion · three years · High confidence 100
    And we are planning to start 100 labs in three years.

    — Amar Singh, Chairman and Managing Director

  • New labs and comprehensive centers Network Expansion · next year · High confidence 13 labs and 3 comprehensive centers
    And looking ahead, we are preparing to launch three more comprehensive centres and 13 laboratories across three states next year. This is our next year plan.

    — Amar Singh, Chairman and Managing Director

Specialized Diagnostics

  • Genome lab at Lucknow Specialized Diagnostics · H1 '27 · High confidence 1
    And one Genome lab at Lucknow and one PET scan at Gorakhpur, this is our first PET scan, is also planned in H1 '27.

    — Amar Singh, Chairman and Managing Director

  • PET scan at Gorakhpur Specialized Diagnostics · H1 '27 · High confidence 1

    — Amar Singh, Chairman and Managing Director

Wellness & Central Lab

  • Wellness center and central lab at Jankipuram, Lucknow Wellness & Central Lab · H1 '27 · High confidence Operational
    Our wellness centre and central lab will also start in H1 '27 at Jankipuram, Lucknow, together with all the radiological services.

    — Amar Singh, Chairman and Managing Director

Profitability

  • Pharmacy EBITDA Margin Profitability · next one year · High confidence 10%
    But of course our pharmacy business is going on, and it is running and we are targeting for 10% EBITDA in next one year, definitely that we will achieve.

    — Amar Singh, Chairman and Managing Director

  • Overall EBITDA Margin Profitability · future · Medium confidence 30-35%
    But as soon as we will have more and more centres that becomes older and more matured then EBITDA margin increases. ... Basically if we average out it will remain between 30% to 35%.

    — Amar Singh, Chairman and Managing Director

  • Overall EBITDA Margin Profitability · Q4 FY27 · High confidence 30-32%
    Okay. So by quarter four FY'27 can we expect the overall EBITDA margins to be around 30%-32%?

    — Amar Singh, Chairman and Managing Director

Revenue Growth

  • Revenue growth Revenue Growth · next financial year · Medium confidence >30%
    This is much less, what we are we are going to give. It is much less, what you are talking. It is much less. It will be much much higher.

    — Amar Singh, Chairman and Managing Director

Government Contracts

  • Punjab and Guwahati project annual collection Government Contracts · per year for 10 years · High confidence 55 crores
    It's a project of nearly INR55 crores a year, for 10 years. It is a INR550 crores project. INR55 crores per year is the collection money.

    — Amar Singh, Chairman and Managing Director

Market Position

  • Ranking among diagnostic chains in India Market Position · next two to three years · Medium confidence Top 4-5
    So in next two three years definitely, we can go amongst first four or five but not two to three, just because there are three four big players.

    — Amar Singh, Chairman and Managing Director

Business Mix

  • B2C, B2B, B2G mix Business Mix · future · Medium confidence 33% each
    But our aim is to keep all these three at a equal level. 33%, 33%, 33%. This is our aim.

    — Amar Singh, Chairman and Managing Director

What to watch in Q4 FY26

New Lab and Comprehensive Center Launches

next month
Current 6 comprehensive centers, 18 labs started in FY26
Target 7 comprehensive centers, 27 labs (total) operational

Why it matters

To verify the execution of aggressive expansion plans and the growth of the physical network.

Next month, we will launch nine more labs... and one by one, these labs will be started in this month and very next month. ... Our expansion continues with another comprehensive centre scheduled to open in Raipur next month.

Risks & concerns

  • Longer receivable periods for B2G business

    medium

    B2G business typically involves 3-4 months for receivable collection, influencing the company's preference for B2C.

    But our aim is to keep B2C at the highest level, B2B at the second level and B2G at the last level, just because of receivable amount, and that takes nearly three to four months in case of B2G.

    Management acknowledged

  • Temporary increase in employee costs during expansion

    medium

    Employee costs are rising rapidly (18% of revenue) due to advance hiring for new centers, which temporarily impacts margins.

    Sir it is because of organic expansion. ... That is the reason employee cost will definitely increase for -- it will appear to increase for some time, and as soon as we will start getting the business it will come down.

    Management acknowledged

  • One-time gratuity provision impacting PAT margin

    low

    A one-time provision of ₹2.2 crores for gratuity due to a new labor code caused a slight dip in PAT margin for Q3 FY26.

    I need to mention that during this period, during this quarter, we did a provision of INR2.2 crores, which is exceptional one-time provisioning of gratuity cost. ... So PAT margin was 6.9%, which is 7 basis point down, because of this one-time exceptional item of INR2.2 crores.

    Management acknowledged

Q&A highlights

8 direct
Capex requirements for franchisee model expansion Direct
Sir, for franchisee, we don't need to invest anything. Actually, we have to invest in our labs only. ... And for that, we are planning to invest nearly INR100 crores in three years. ... That simply means for each laboratory we are investing nearly INR1 crore.

Clarifies the company's asset-light franchisee model and the capital expenditure strategy focused on central labs rather than individual collection points.

Asked by Priyanshu Jain

Competitive differentiation against larger diagnostic players Direct
But our main business belongs to our comprehensive centres which gives all pathological and radiological services. ... And in case of comprehensive centres, we don't have any competition of a larger player. We just have a competition from a local players.

Explains Chandan's strategy of offering comprehensive services under one roof, positioning it differently from large players focused on collection points and local competitors.

Asked by Priyanshu Jain

Sustainability and improvement trajectory of EBITDA margins Direct
Definitely, EBITDA margin will improve, just because, during the course of expansion, and this EBITDA margin is affected for some time. But as soon as we will have more and more centres that becomes older and more matured then EBITDA margin increases.

Addresses concerns about margin fluctuations, attributing current impacts to expansion costs and projecting future improvement as new centers mature and operational leverage kicks in.

Asked by Priyanshu Jain

Explanation for the one-time exceptional loss of ₹2.2 crores Direct
It is due to new labour code; the gratuity was basically Rajeev you can tell exactly. ... Yes sir, because of provisioning of employee gratuity cost, as there is a revision in wages as per new labour code, so the provision is higher as compared to normal quarters. So this is one-time provisioning.

Provides a clear reason for the reported exceptional item, confirming it as a non-recurring expense related to regulatory changes rather than operational issues.

Asked by Taher Hydrabadwala

Rapid increase in employee costs and its impact on profitability Direct
Sir it is because of organic expansion. And as I told, we have started 18 labs in this financial year, and seven comprehensive centres in this financial year. That is the reason employee cost will definitely increase for -- it will appear to increase for some time, and as soon as we will start getting the business it will come down.

Explains the temporary nature of high employee costs as an investment for future growth, with an expectation of normalization as new facilities become operational and generate revenue.

Asked by Abhi Jain

Sustainability of high B2C EBITDA margins (35-40%) with PAN-India expansion Direct
If it is B2C business then it is 35% to 40%. But at the same place, we are doing B2B, and franchisee business also and corporate business also. So we expect around 30% to 35% EBITDA everywhere. Because we it is averaged out, just because we are doing all type of business. Vijaya is doing only B2C business.

Clarifies that while B2C margins are high, the blended average for Chandan will be lower due to its diversified business model (B2B, B2G), but still robust, and comparable to B2C-focused peers.

Asked by Abhi Jain

Company's plans and outlook for molecular diagnostics Direct
Yes sir. It has already started coming to our centres. ... That's why we are going to have genetic lab in next six months at Lucknow. ... Because the future belongs to three things only. Cancer, IVF and genetic lab. These three things are the future of healthcare.

Highlights the company's strategic entry into high-growth, specialized molecular diagnostics, indicating future investment and focus on advanced healthcare segments.

Asked by Preet Jain

Challenges and risks associated with the aggressive expansion plans Direct
No sir. I have a full team of 40 persons and they are on it, and we are working day night, and we have got the money from preferential shares also. So as far as finance is concerned, as far as working people are concerned, we are on it, and we don't see any challenge in starting all these centres.

Reassures investors about the company's preparedness for expansion, citing adequate human resources, financial backing, and a strategic focus on less competitive Tier 2/3/4 cities.

Asked by Prabhat Kumar

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance

Chandan Healthcare Limited reported a strong Q3 FY26, with revenue growing 20% year-on-year to ₹65.77 crores. EBITDA saw a significant increase of 39% year-on-year, reaching ₹12.61 crores, and EBITDA margin expanded by 263 basis points to 19.17%. Profit After Tax (PAT) grew 7.97% year-on-year to ₹4.54 crores. However, PAT margin slightly decreased by 7 basis points to 6.9% due to a one-time exceptional provision of ₹2.2 crores for gratuity, mandated by a new labor code.

Expansion & New Initiatives

The company is aggressively expanding its network, having started six comprehensive diagnostic centers and 18 labs in the current financial year. Nine more labs and a comprehensive center in Raipur are scheduled to open next month. Looking ahead, Chandan plans to launch three more comprehensive centers and 13 laboratories across three states next year, aiming for a total of 100 labs and 1,000 franchisee centers within three years. Additionally, two new wellness centers are set to open in Delhi and Raipur next month.

Business Model & Competitive Edge

Chandan Healthcare differentiates itself by focusing on comprehensive centers offering both pathological and radiological services under one roof, attracting direct patient footfall. While it also operates a franchisee model for sample collection, its primary business model emphasizes direct patient engagement and a broader service offering. The company aims for a balanced revenue mix across B2C, B2B, and B2G segments, targeting 33% from each, though B2C is currently prioritized due to better margins and faster receivables.

Government Contracts & PPP

The company has secured a significant government contract in Punjab and Guwahati for radiology services in eight district hospitals and one railway hospital. This project is estimated to generate ₹52 crores annually for 10 years, totaling ₹550 crores. Under this Public-Private Partnership (PPP) model, Chandan will install MRI and CT scans and collect payments directly from patients, with operations expected to commence within the next six months. This initiative is seen as a major growth driver for the upcoming year.

Specialized Diagnostics Expansion

Recognizing the future importance of specialized diagnostics, Chandan is planning to launch a Genome lab in Lucknow and a PET scan facility in Gorakhpur in H1 FY27. These advanced services are crucial for areas like cancer, IVF, and genetic testing, and the company is investing approximately ₹1 crore per lab to ensure high-quality, closed-system operations. This strategic move aims to cater to growing demand and enhance the company's specialized service portfolio.

Profitability & Margin Outlook

Management expects EBITDA margins to improve consistently, targeting an overall range of 30-35% in the future, and specifically 30-32% by Q4 FY27. While current employee costs are elevated (18% of revenue) due to advance hiring for expansion, these are expected to normalize as new centers mature and business volumes increase. The company also aims to achieve a 10% EBITDA margin for its pharmacy business within the next year.

Capital Allocation & Liquidity

Chandan Healthcare plans to invest approximately ₹100 crores in new labs over the next three years, with each lab costing around ₹1 crore. The company has already raised ₹104 crores through preferential shares, with ₹26 crores received in the current month, ensuring sufficient liquidity for its expansion plans. Management confirmed that working capital is improving quarter-to-quarter, and the company expects to generate positive net cash inflow from operating activities this year, indicating a healthy financial position for future growth.

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