Summary
Krsnaa Diagnostics Limited - Q3 FY 2026 Earnings Call Summary Friday, February 06, 2026, 12:30 Hrs. IST
Event Participants
Executives 5 Mitesh Dave (Group CEO), Ms. Pallavi Bhatevara (Executive Director), Rajendra Mutha (Chairman), Vivek Jain (Head Investor Relations), Yash Mutha (Managing Director)
Analysts 11 Abhishek G, Anish Moonka, Bala Murli Krishna, Deepali Bansal, Deepak Ajmera, Harish Singh, Kartik Gada, Lokesh Manik, Mayur, Mohammed Patel, Niteen Dharmawat, Raghav Bhutoria, Surya Patra, Tushar Raghatate
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹181.2 crores | +4% YoY; Impacted by seasonality and conscious operational pauses for receivable recovery. |
| Reported EBITDA | ₹47.4 crores | 26% margin; Impacted by cost absorption for the Rajasthan project rollout without corresponding revenue. |
| Normalized EBITDA | ₹48.4 crores | 27% margin; Adjusted for temporary project readiness and employee costs in Rajasthan. |
| Normalized PAT | ₹16.8 crores | 9% margin; Reflects resilience despite expansion-related headwinds and seasonal softness. |
| Collections | ₹133 crores | +₹100 crores YoY; Materially strengthened cash position through disciplined recovery of government dues. |
| Patient Volume | 4.6 million | Count for Q3; Total served to date exceeds 81 million patients across 18 states/UTs. |
| Retail Revenue Contribution | 8% | Contribution to 9MFY26 group revenue; Retail segment revenue grew 8x YoY. |
Geographic & Segment Commentary
- Rajasthan Project: The project is in the intensive implementation phase with 20 labs installed and 300 collection centers active. Management expects the project to be fully operational by Q4 FY26, with a target of ₹200 crores in annualized revenue for FY27.
- Maharashtra Radiology: Implementation is ongoing with 10 MRI sites nearing completion. Delays were attributed to site clearances and local administrative issues, but revenue contribution is expected to commence in Q4 FY26 and scale in FY27.
- B2C / Retail Segment: Significant expansion to 3,000+ touchpoints across Maharashtra, Punjab, Assam, and Odisha. Management is focusing on long-term B2C brand building over quick B2B wins, aiming for 15-25% growth in touchpoints in coming quarters.
Company-Specific & Strategic Commentary
- Receivable Management Strategy: Management undertook deliberate operational pauses in specific projects (Himachal Pradesh, Karnataka) to enforce payment. This resulted in a ₹133 crore recovery and confirmed fund flows from previously stuck government accounts.
- Apulki Healthcare Partnership: Operationalized the first PPP-based 150-bed cancer and cardiac care hospital in Pune. This provides a 60-year revenue visibility and allows Krsnaa to capture high-value specialty oncology and cardiology diagnostics.
- Technological Moat: The company operates 190 CT/MRI centers and 140 labs, with 2.5x higher upfront capex than pathology-only peers. Management dismissed technology obsolescence risks, noting the 10-15 year life of CT scanners and 40-year life of MRI magnets.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Rajasthan Revenue | ~₹200 crores (Annualized) | Target for FY27 as labs and collection centers reach full operational scale. |
| Base Business Growth | Higher Teens (%) | Expected annualized growth rate for existing PPP business, excluding new large-scale tender rollouts. |
| Group Margins | Stable (26-27%) | Management aims to maintain margins despite the shift toward lower-margin pathology (65-70% of mix post-Rajasthan). |
| Apulki Revenue | ~₹20 crores per hospital | Mature revenue level expected within 2-3 years of stabilization for the Pune facility. |
Risks & Constraints
| Risk | Context |
|---|---|
| Margin Dilution | The rapid shift toward a pathology-heavy revenue mix (Rajasthan/Maharashtra) may pressure the high margins historically derived from radiology. |
| Government Dependency | Business remains sensitive to policy changes, budgetary limits, and administrative delays in site clearances or payment cycles. |
| Capex Front-loading | Significant upfront investment in equipment and manpower (e.g., Rajasthan) creates a timing mismatch where costs precede revenue, impacting near-term ROE. |
Q&A Highlights
Receivable Recovery
- Question: What is the status of long-pending dues from Himachal and Karnataka? (Niteen Dharmawat)
- Answer: ₹40 crores was recovered from Himachal, and formal payment confirmations were received from Karnataka. Total Q3 collections were ₹133 crores due to disciplined enforcement (Yash Mutha).
Rajasthan Rollout
- Question: What is the revenue and cost trajectory for the Rajasthan tender? (Vishal C)
- Answer: Aiming for ₹200 crores in FY27. Manpower and rent costs are being front-loaded in Q4 FY26, which may cause a “slight dent” in margins before normalizing (Yash Mutha).
Capital Allocation
- Question: Why has ₹700 crores in investment over 3.5 years not yielded higher top-line growth? (Anish Moonka)
- Answer: Growth was slowed by temporary bottlenecks, site clearance delays in Maharashtra, and deliberate pauses for receivable recovery. The core model remains intact with significant headroom as only 100+ of 730 Indian districts are currently covered (Yash Mutha).
Segment Mix
- Question: How will the revenue split change following the new project launches? (Vishal C)
- Answer: Currently 50-50 radiology/pathology; however, post-Rajasthan and Maharashtra rollouts, pathology is expected to constitute 65-70% of total revenue (Yash Mutha).
Key Takeaway
Krsnaa Diagnostics reported a stable Q3 FY26 with revenue of ₹181.2 crores (+4% YoY), hindered by seasonal factors and a strategic decision to pause operations in select regions to recover ₹133 crores in government receivables. The company is in a capital-intensive expansion phase, aggressively rolling out the Rajasthan pathology project (targeting ₹200 crores FY27 revenue) and the Maharashtra MRI sites. While front-loaded costs for these projects and a shifting mix toward pathology (expected to reach 70% of revenue) may cap near-term margin expansion, the core EBITDA margin remains healthy at 26-27%. Strategically, the entry into tertiary care via the Apulki PPP hospital aligns with a long-term goal of high-specialty diagnostics integration. Looking ahead, management expects to achieve “higher teens” growth in the base business and reach a breakeven point for the Rajasthan project by Q4 FY26.
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