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Suraksha Diagnostic Limited — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

Suraksha Diagnostic Limited reported robust Q3 FY26 results with total income growing 30.3% YoY to INR 783.09 million, driven by strong volume growth and strategic expansion into genomics. While EBITDA margins compressed temporarily to 30.6% due to new center ramp-up costs, management is focused on achieving scale and expects margin improvement from Q3 FY27. The company is aggressively expanding its network and strengthening its genomics vertical, maintaining a healthy net cash position.

Highlights

Total income for Q3 FY26 grew by a solid 30.3% year-on-year to INR 783.09 million, driven by volume expansion and product mix.
Tests performed in Q3 FY26 increased by 30.7% year-over-year to 2.06 million, indicating strong operational growth.
The company successfully commissioned 12 new centers in nine months, with an additional 6 facilities in the execution phase.
The genomics and molecular vertical, 'Suraksha Sutra,' has shown positive clinical adoption, with a current run rate of INR 2.1-2.2 million per month and a target of INR 4+ crores for FY27.
The company maintains a strong balance sheet with negligible gross debt (INR 1-1.5 crores) and a positive net cash position of approximately INR 29 crores.

Concerns

EBITDA margin compressed to 30.6% in Q3 FY26 (from 32.1% in 9M FY26) due to higher initial operating costs of new centers, impacting PAT margin to 9.3% from 10.1% in Q3 FY25.
Management expects FY26 EBITDA margin to be around 32%, lower than the initial guidance of 33-34%, due to pre-operative expenses for new centers.
The company acknowledges potential price reduction in genomics due to new entrants and patents expiring, though they believe their technology and service will differentiate them.

Key financials

2 periods

Q3 FY26

Total Income
783.09 Mn
YoY +30.3%
Tests Performed
2.06 Mn
YoY +30.7%
Patients Served
0.36 Mn
YoY +23%
EBITDA
237.82 Mn
YoY +26.1%
EBITDA Margin
30.6%
PAT
72.41 Mn
PAT Margin
9.3%

9M FY26

Total Income
2,313.81 Mn
YoY +21.9%
EBITDA
734.04 Mn
YoY +12.8%
EBITDA Margin
32.1%
Revenue per Patient
₹2,140
EBITDA per Patient
₹686

What they filed

Q1 FY27: revenue up 20.5%, net profit up 44.4% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	67	60	65	73	79 +18%	78 +30%	81 +25%	88 +21%
Expenses	44	41	46	49	55	55	57	57
EBITDA	23	18	19	24	24 +4%	23 +28%	24 +26%	30 +25%
Margin	35%	31%	29%	33%	31%	30%	30%	35%
Other income	1	1	1	1	1	1	1	1
Interest	2	2	2	3	3	3	4	4
Depreciation	9	9	9	9	10	11	11	11
Profit before tax	14	8	9	12	12 −14%	10 +25%	10 +11%	17 +42%
Tax rate	26%	26%	22%	26%	27%	28%	38%	22%
Net profit	10	6	7	9	9 −10%	7 +17%	6 −14%	13 +44%
EPS	2.40	1.18	1.42	1.80	1.73	1.44	1.21	2.50

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

Service Mix (9M FY26)
46% Radiology48% Pathology6% Doctor/OPD
Customer Mix (9M FY26)
92% B2C7% B2B

Capital allocation

high confidence

Debt Gross ₹1.5 Cr · Net cash ₹29 Cr

The net debt as on date is very negligible because the borrowing, we have not borrowed any money as of now. So it is in the books around INR1 to INR1.5 crores is there as on date as a gross debt, but net debt will be positive with like around INR29 crores.
M&A Fetomat Acquisition · Integrated

Extension of fetal medicine, providing a foothold in genomics and enabling in-house testing.
Leveraged to start in-house testing with initial starts through Fetomat acquisition. Market connects and doctor engagements started showing early signs of getting more business to Fetomat.

So Fetomat is an extension of fetal medicine, which gynecologists mostly were driving earlier and now there are fetal medicine experts that are doing invasive procedures getting into genomics. So certainly it has given a foothold in genomics for to Suraksha after the acquisition. It has leveraged us to start in-house testing, with the few initial starts through Fetomat acquisition. And plus going forward, all our market connects and doctor engagements have started showing early signs of early signs of getting our more business to Fetomat as well.

Guidance & targets

Revenue

FY26 Revenue Growth Revenue · FY26 · High confidence better than 15%

Previously 15% → better than 15%

See, we definitely are delivering better revenue as compared to what we committed, but the EBITDA will take a drag because of the pre-operative expenses of all the new centers that we are adding.

— Ritu Mittal
Genomics Annual Revenue Run Rate Revenue · next financial year (FY27) · High confidence INR 4+ crores

So annual run rate we expect to see is around INR4 CR, INR4 plus CR for next financial year.

— Niren Kaul

Margin

FY26 EBITDA Margin Margin · FY26 · High confidence around 32%

Previously 33-34% → around 32%

So it might end at around 32% sort of figure.

— Ritu Mittal
EBITDA Margin Improvement Margin · FY27 third quarter · High confidence improvement

I think FY'27 third quarter.

— Ritu Mittal

Capacity

New Centers Added Annually Capacity · every year · High confidence 12 to 15 centers

And PPP centers, I will once again reiterate that we really don't actively look for, but sometimes we are forced to do. And so we are definitely not looking for PPP projects in the future.

— Ritu Mittal
New Centers Operational (Q4 FY26) Capacity · Q4 FY26 · High confidence 60-70% of 6 centers

For Q4. So I believe 60%, 70% of this will definitely be operational and one or two might spill onto the first month of the next financial year.

— Ritu Mittal
Total Centers Capacity · FY28 · High confidence 100 centers

Yes. When are we targeting 100 centers by which financial year? FY'28.

— Ritu Mittal

Capex

Annual Capex for New Centers Capex · FY27 · High confidence INR 70 crores

So we would again target 12 to 15 centers with a similar capex of 70 CR.

— Ritu Mittal

What to watch in Q4 FY26

New Centers Operational (Q4 FY26)

Q4 FY26 / next financial year

Current 6 centers in execution for Q4 FY26

Target 60-70% of 6 centers operational

Why it matters

Indicates progress on network expansion and potential for future revenue growth.

For Q4. So I believe 60%, 70% of this will definitely be operational and one or two might spill onto the first month of the next financial year.

Risks & concerns

EBITDA Margin Compression due to New Center Ramp-up
medium

Aggressive network expansion leads to higher initial operating costs, temporarily compressing EBITDA margins. Management views this as a strategic investment for long-term dominance and scale.

Management acknowledged
Price Reduction in Genomics Market
medium

The genomics market is evolving, with patents expiring and new entrants expected, which could lead to price reductions. Management believes their technology and service differentiation will help navigate this.

Management acknowledged
Low Margins and Receivables in PPP Projects
low

Management actively avoids PPP projects due to their inherently low-margin nature and potential challenges with receivables, preferring to deploy capital in other centers.

Management acknowledged

Q&A highlights

8 direct

Q3 EBITDA Margins and Seasonality Direct

The Q3 margins are always the quarter three is the weakest quarter in healthcare. That is almost a given for... it's a seasonal thing basically and that's almost a given for any kind of healthcare anywhere.

Clarifies that the lower Q3 EBITDA margins are a seasonal effect common in the healthcare industry, not a company-specific issue.

Asked by Dhruv Maheshwari

Current Run Rate for Genomics Business Direct

So currently what we are running at is around INR2.1, INR2.2 million a month we are running. So last quarter Q3 we kind of reached at around INR53 lakhs.

Provides specific, current financial performance data for the high-growth genomics segment, which is a key strategic focus.

Asked by Dhruv Maheshwari

Net Debt / Net Cash Position Direct

The net debt as on date is very negligible because the borrowing, we have not borrowed any money as of now. So it is in the books around INR1 to INR1.5 crores is there as on date as a gross debt, but net debt will be positive with like around INR29 crores.

Confirms the company's strong balance sheet with a positive net cash position, indicating financial stability and capacity for growth without significant new borrowing.

Asked by Nancy Yadav

Competitive Differentiation in Genomics Direct

But the only genomic, complete genomic lab in the entire East and Northeast belongs to Suraksha. There are a couple of reasons why we have an advantage. One is the turnaround time. These are these being highly specialized tests, so these take time. The turnaround time for these tests will be lower in our case for samples received from Eastern India. And two, Suraksha has built a technology team, like we said.

Highlights Suraksha's unique competitive advantages in the genomics space, particularly its regional dominance and operational efficiencies, against larger national players.

Asked by Akash

FY26 Margin Outlook and Strategy for Scale Direct

See, we definitely are delivering better revenue as compared to what we committed, but the EBITDA will take a drag because of the pre-operative expenses of all the new centers that we are adding. So it might end at around 32% sort of figure. But what we have to understand is as far as Suraksha is concerned, we need the scale today.

Explains the rationale behind the revised margin guidance, emphasizing the strategic priority of achieving scale through network expansion, even if it temporarily impacts profitability.

Asked by Akash

EBITDA Loss from New Centers Direct

Yes, just give me a minute. I will tell you the EBITDA loss. It's around INR2 crores.

Quantifies the short-term financial impact of new center expansion on profitability, providing clarity on the source of margin compression.

Asked by Siddhant

Strategy on PPP Centers and Associated Risks Direct

PPP typically is a very low margin business. So, you know, we would rather deploy... But the volumes might be very high and quite predictable, only the issue is the receivable side, right? I mean, that is the problem that we hear.

Reveals management's cautious approach to PPP projects due to concerns about low margins and receivable management, indicating a disciplined capital allocation strategy.

Asked by Hitaindra Pradhan

Raw Material Cost Pressure in Pathology vs. Non-Pathology Direct

For pathology, we have long-term contracts wherein the global headwinds do not matter much because our prices of the products are capped for longer period of time, right? So we kind of do that. But recently what we saw with non-pathology inventory, which mostly is films, so they were chasing a price impact because of the rise in the silver prices. But eventually last week you saw there was a major re-correction in the silver prices, so we expect the prices to remain stable for the period of time.

Provides a detailed breakdown of cost pressures, distinguishing between stable pathology costs and volatile non-pathology costs, and offers an outlook on stabilization.

Asked by Hitaindra Pradhan

2 min read 6 chapters

Detailed narrative

Strong Topline Growth Driven by Volume and Product Mix

Suraksha Diagnostic Limited reported a robust 30.3% year-on-year growth in total income for Q3 FY26, reaching INR 783.09 million. This growth was primarily fueled by a combination of volume expansion from new centers and an improved product mix, particularly from the genomics vertical. The number of tests performed increased by 30.7% year-over-year to 2.06 million, and patients served grew by 23% to 0.36 million in the quarter, demonstrating strong operational momentum.

Strategic Investment in Genomics and Digital Pathology

The company has made significant strides in advanced diagnostics, establishing the first complete genomic lab in Eastern India, offering cytogenetics, microarray, PCR, and next-gen sequencing. All molecular lab tests are CAP validated. Furthermore, Suraksha is building one of the first digital pathology platforms under the leadership of Dr. Geetashree and applying AI for CT and MRI reporting, aiming for quicker turnaround times and improved efficiency. These initiatives are expected to drive future growth and differentiate the company.

Network Expansion and Temporary Margin Compression

Suraksha's aggressive network expansion saw 12 new centers fully commissioned and operational within nine months, with an additional six facilities currently in the execution phase for Q4 FY26. This expansion, while driving topline growth, led to a temporary compression in EBITDA margins, which stood at 30.6% in Q3 FY26, down from 32.1% for the nine-month period. The management views this as a conscious investment in scale, expecting margins to improve from Q3 FY27 as the new centers mature and achieve economies of scale.

Genomics Vertical - 'Suraksha Sutra' Traction

The genomics and molecular vertical, branded 'Suraksha Sutra,' has garnered significant clinical adoption, proving to be a key differentiator against price commoditization in routine testing. The current run rate for genomics is INR 2.1-2.2 million per month, with Q3 contributing INR 53 lakhs. The company projects this vertical to achieve an annual revenue run rate of INR 4+ crores for FY27, highlighting its strategic importance and growth potential.

Capital Allocation and Debt Management

The company maintains a very healthy financial position with negligible gross debt, reported at INR 1-1.5 crores, and a positive net cash position of approximately INR 29 crores. For FY27, Suraksha plans to add 12-15 new centers, excluding PPP projects, with an estimated capex of INR 70 crores. Management explicitly stated a preference for deploying capital in centers with better margins and manageable receivables, thus generally avoiding PPP models due to their low-margin and high-receivable nature.

Market Positioning and Competitive Landscape

Suraksha positions itself as the leading organized diagnostic player in Eastern India, emphasizing its complete genomic lab and advanced technological capabilities. While acknowledging the entry of larger players like Dr. Lal and Metropolis into genomics, Suraksha believes its regional focus, faster turnaround times for specialized tests, and strong technology team provide a distinct competitive advantage. The company aims to reach 100 centers by FY28, further solidifying its market presence.

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

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