Skip to content

    Krsnaa Diagnostics Q1 FY26 earnings call

    KRSNAA
    Healthcare·12 Aug 2025
    Management Summary

    Krsnaa Diagnostics reported a strong Q1 FY26, with revenue growing 13% YoY to ₹193 crores and EBITDA margin expanding to 27%. The company secured a significant Rajasthan PPP contract, projecting ₹300-350 crores in annualized revenue, and saw its retail business accelerate, now contributing 6% to total revenues. While overall volume growth was subdued, management expects improvement in coming quarters and is focused on leveraging its PPP backbone for retail expansion and maintaining cost leadership.

    Highlights

    5

    • Revenue grew 13% YoY to ₹193 crores (INR 1,930 million) in Q1 FY26, demonstrating robust growth.

    • EBITDA margin expanded by 120 basis points to 27%, with EBITDA growing 19% YoY to ₹52.4 crores (INR 524 million).

    • Profit After Tax (PAT) increased 15% YoY to ₹20.5 crores (INR 205 million), achieving an 11% margin.

    • The company secured the Rajasthan PPP contract, involving an investment of ₹200-250 crores and an annualized revenue potential of ₹300-350 crores.

    • Retail momentum accelerated significantly, with touch points increasing 7x YoY to 2,414, and retail contributing 6% to overall group revenues.

    Concerns

    2

    • Overall volume growth was subdued at approximately 4% due to the past impact of the BMC contract and suspended operations in some projects.

    • Cost of material consumed increased sequentially from 22% to 25%, impacting EBITDA by approximately 3%.

    What Changed2

    vs Q2 FY26

    Risks discussed3 → 2 (-1)Q&A highlights8 → 6 (-2)

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue1,930 Mn+13%YoY
    2. 02EBITDA524 Mn+19%YoY
    3. 03EBITDA Margin27%
    4. 04PAT205 Mn+15%YoY
    5. 05PAT Margin11%

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    combination of internal accruals, debt at efficient cost, and leasing/reagent rental models

    Debt

    Debt disclosed

    Guidance & targets

    9
    CategoryTargetPriority
    Revenue
    Overall Revenue Growth
    better than industry average (higher than 15-16%)
    		Medium
    Revenue
    Retail Contribution to Total Revenue
    5-8%
    		High
    Revenue
    Retail Contribution to Total Revenue (Longer Term)
    18-20%
    		Medium
    Revenue
    Rajasthan Project Annualized Revenue
    ₹300-350 crores
    		High
    Revenue
    Rajasthan Project Full Revenue Potential
    full revenues
    		High
    Profitability
    EBITDA Margin
    25-26%
    		High
    Profitability
    Retail Business Breakeven
    breakeven
    		High
    Capacity
    Rajasthan Project Implementation Timeline
    6-9 months
    		High
    Capacity
    Maharashtra CT/MRI Implementation
    majority done
    		High

    What to watch in Q2 FY26

    5

    Rajasthan Project Ramp-up and Revenue Flow

    next quarter / FY27
    CurrentRamp-up expected to start in next couple of months, taking 6-9 months for full implementation. Revenue from next financial year (FY27).
    TargetProgress on implementation, start of revenue flow.

    Why it matters

    The Rajasthan PPP contract is a transformative achievement, and its timely implementation and revenue contribution are key to future growth.

    In terms of the project ramp-up, we expect the ramp-up to start in the next couple of months, which will probably take about 6 to 9 months, and the revenue will start flowing from the next financial year.

    Risks & concerns

    2
    RiskSeverity

    Subdued Volume Growth

    Overall volume growth was approximately 4%, attributed to past BMC contract and suspended operations, though retail growth is offsetting. — Analyst acknowledged

    medium

    Increase in Cost of Material Consumed

    Sequential increase from 22% to 25% impacted EBITDA by ~3%, linked to pathology revenue growth, with mitigation efforts planned for Rajasthan. — Analyst acknowledged

    medium

    Q&A highlights

    6

    “In terms of the project ramp-up, we expect the ramp-up to start in the next couple of months, which will probably take about 6 to 9 months, and the revenue will start flowing from the next financial year. ... we look at CAPEX in the range of about INR 200 crores to INR 250 crores, which will help us achieve revenues in the range of about INR 300 crores to INR 350 crores on an annualized basis.”

    Analyst sought clarity on the financial outlay and expected returns from the newly awarded, significant Rajasthan contract, which management provided with specific numbers and timelines.

    asked by Surya Patra

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY26 Financial Performance Highlights

    Krsnaa Diagnostics reported a robust Q1 FY26, with revenue growing 13% year-on-year to INR 1,930 million (₹193 crores). This growth was accompanied by a significant 120 basis point expansion in EBITDA margin, reaching 27%, with EBITDA at INR 524 million (₹52.4 crores), up 19% YoY. Profit After Tax (PAT) also saw a healthy increase of 15% YoY to INR 205 million (₹20.5 crores), resulting in an 11% PAT margin and an EPS of INR 6.25, a 14% YoY rise.

    02

    Transformative Rajasthan PPP Contract Win

    A major highlight was the award of the Rajasthan PPP contract, which is expected to be transformative for the company. This project involves an estimated CAPEX of INR 200-250 crores and is projected to generate annualized revenues of INR 300-350 crores once fully operational. The ramp-up is anticipated to begin in the next couple of months, with full implementation over 6-9 months, and material revenues expected from FY27 onwards, reaching full potential within 1.5-2 years.

    03

    Accelerating Retail Business Momentum

    The company's retail momentum is accelerating, with touch points surging 7x year-on-year to 2,414. Retail now contributes 6% to the overall group revenues, compounding quarter after quarter. Management targets retail contribution to reach 5-8% of total revenue by FY26 and 18-20% within the next two years, aiming for breakeven by the end of FY26. This expansion leverages the existing PPP backbone for logistics and brand trust.

    04

    Strategic Partnerships and Project Updates

    Krsnaa Diagnostics continues to expand its network, operationalizing 3 labs, 2 CTs, and 3 MRI centers in Q1 FY26. For Q2 FY26, plans include implementing 7-8 MRI sites in Maharashtra/Madhya Pradesh, 1 in Uttar Pradesh, and remaining centers in Jharkhand. The company's partnership with Apulki for integrated diagnostics in oncology hospitals provides 30-year revenue visibility and access to urban dense areas, further supporting retail growth. The decision not to renew the BMC contract was based on tender conditions not being financially viable, aligning with the company's focus on value creation.

    05

    Cost Leadership and Pricing Strategy

    Despite offering prices 70-90% below prevailing market rates, Krsnaa Diagnostics maintains comparable margins to peers. This is achieved through cost leadership derived from PPP cost synergies (e.g., rent, marketing), high volumes from captive customers, and efficient asset utilization. The company's model allows it to pass value to customers while sustaining profitability, with EBITDA margins targeted to remain at 25-26%.

    06

    Working Capital and Volume Dynamics

    Working capital improved in Q1 FY26, with receivables at approximately 120 days, aided by the receipt of overdue payments from projects and the cash-paying nature of the retail business. While overall volume growth was subdued at around 4% due to the past BMC contract and suspended operations, management expects much better growth in the coming quarters⏳, driven by retail expansion and new initiatives. The sequential increase in the cost of material consumed from 22% to 25% was noted, primarily due to pathology revenue growth, with efforts underway to mitigate its impact.

    This is an AI-generated summary of a publicly available earnings call transcript.