Any current/future new fundraising through debt or equity?

The company aims to maintain existing debt levels around INR53 crores as of March 2024 and does not foresee significant increases in the near term. Debt discussed primarily relates to short-term working capital needs due to increased receivables and investment in capital expenditure (e.g., down payments on equipment). Management’s stance is to try to be debt-free but expects to maintain manageable debt levels given business growth dynamics. There is no explicit mention of any immediate or planned equity fundraising in the disclosed discussions. Future decisions on capital expenditure, such as

Any current/future capex/capital investment/strategic investment?

FY '25 and FY '26 capex is expected around INR 150 crores, excluding Rajasthan. If Rajasthan project comes through, capex could increase to around INR 250 crores (INR 50 crores incremental). Exact Rajasthan capex to be clarified once project details are finalized. Focus on asset-light model for B2C expansion, leveraging existing lab infrastructure with minimal incremental capex. Investments include setting up of new pathology labs and deployment of radiology equipment such as CT scans and MRIs. Maharashtra: 10 CT scans operationalized; 29 more to be operationalized soon with revenue expected f

Future growth expectations in sales/revenue/volumes?

Krsnaa Diagnostics targets a robust revenue growth with a CAGR of approximately 25%-30% over the next 2-5 years. FY’24 revenue was INR 620 crores with 27% YoY growth; strong momentum expected to continue. Expansion is focused on radiology and pathology, with a 60:40 radiology to pathology mix anticipated. New tenders and projects, especially in radiology (CT scans, MRIs), will drive incremental growth. B2C business is an emerging segment expected to grow steadily, starting from around 2%-3% of revenue. Mature PPP centers typically achieve higher margins and stable revenue growth after 3 years.

Future growth expectations in earnings/operating earnings/profits/EPS?

Krsnaa Diagnostics expects revenue CAGR of 25%-30% over the next 2-5 years, targeting around INR 3,000 crores by FY'29-FY'30. EBITDA margins are expected to stabilize around 25% despite gross margin improvements due to increasing pathology share and incremental deployment costs. Gross margins projected to improve from current 74% to about 78% by Q1/Q2 FY'25 after stabilizing consumption costs. Initial incremental costs related to new projects, especially radiology, and leadership for B2C will absorb margin improvements in short term. B2C business, currently a small percentage, is forec

Current/ Expected Orderbook/ Pending Orders?

The company is awaiting the outcome of the Rajasthan tender, which is delayed due to a High Court matter; hearing expected shortly (Page 7). They have won a significant Maharashtra order valued at INR 150 crores (Page 15). The pipeline includes tenders in Andhra Pradesh and other states, but some are on hold until post-election periods conclude (Page 7). The company is monitoring execution progress of CT scan equipment, including an 8-machine tender in Uttar Pradesh, with some delays mainly due to site handover and procedural issues (Page 8). Existing Maharashtra tenders (total 39 CT scans plu

Krsnaa Diagnostics LtdQ1 FY25

Krsnaa Diagnostics Ltd Q1 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹575P/E: 17.7Market Cap: ₹1.8K Cr

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Krsnaa Diagnostics targets a robust revenue growth with a CAGR of approximately 25%-30% over the next 2-5 years.
→FY’24 revenue was INR 620 crores with 27% YoY growth; strong momentum expected to continue.
→Expansion is focused on radiology and pathology, with a 60:40 radiology to pathology mix anticipated.
→New tenders and projects, especially in radiology (CT scans, MRIs), will drive incremental growth.
→B2C business is an emerging segment expected to grow steadily, starting from around 2%-3% of revenue.
→Mature PPP centers typically achieve higher margins and stable revenue growth after 3 years.
→Investments in infrastructure and new capabilities are expected to convert into higher volumes and stable EBITDA margins (~25%) as projects mature.

Margin guidance

Category 3

→Krsnaa Diagnostics expects revenue CAGR of 25%-30% over the next 2-5 years, targeting around INR 3,000 crores by FY'29-FY'30.
→EBITDA margins are expected to stabilize around 25% despite gross margin improvements due to increasing pathology share and incremental deployment costs.
→Gross margins projected to improve from current 74% to about 78% by Q1/Q2 FY'25 after stabilizing consumption costs.
→Initial incremental costs related to new projects, especially radiology, and leadership for B2C will absorb margin improvements in short term.
→B2C business, currently a small percentage, is forecasted to grow gradually, with management aiming to maintain overall EBITDA and revenue growth without significant margin dilution.
→Depreciation costs will remain steady due to revised accounting policies.
→Operational efficiencies and matured PPP projects expected to drive profitability and cash flow improvements over time.

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Fundraise plans

Yes

→The company aims to maintain existing debt levels around INR53 crores as of March 2024 and does not foresee significant increases in the near term.
→Debt discussed primarily relates to short-term working capital needs due to increased receivables and investment in capital expenditure (e.g., down payments on equipment).
→Management’s stance is to try to be debt-free but expects to maintain manageable debt levels given business growth dynamics.
→There is no explicit mention of any immediate or planned equity fundraising in the disclosed discussions.
→Future decisions on capital expenditure, such as in the event of winning the Rajasthan project, will dictate if incremental borrowing is needed.
→Some pay-per-use agreements initiated with partners aim to expand operations without heavy debt or asset commitments.

Order book

→The company is awaiting the outcome of the Rajasthan tender, which is delayed due to a High Court matter; hearing expected shortly (Page 7).
→They have won a significant Maharashtra order valued at INR 150 crores (Page 15).
→The pipeline includes tenders in Andhra Pradesh and other states, but some are on hold until post-election periods conclude (Page 7).
→The company is monitoring execution progress of CT scan equipment, including an 8-machine tender in Uttar Pradesh, with some delays mainly due to site handover and procedural issues (Page 8).
→Existing Maharashtra tenders (total 39 CT scans plus 17 MRI and CT scans) cover a majority of the state, with some municipalities still available for expansion (Page 8).
→The management is confident about handling large orders including Rajasthan and Maharashtra once awarded, stating adequate bandwidth and financial readiness (Page 15).

Capex plans

Yes

→FY '25 and FY '26 capex is expected around INR 150 crores, excluding Rajasthan.
→If Rajasthan project comes through, capex could increase to around INR 250 crores (INR 50 crores incremental).
→Exact Rajasthan capex to be clarified once project details are finalized.
→Focus on asset-light model for B2C expansion, leveraging existing lab infrastructure with minimal incremental capex.
→Investments include setting up of new pathology labs and deployment of radiology equipment such as CT scans and MRIs.
→Maharashtra: 10 CT scans operationalized; 29 more to be operationalized soon with revenue expected from Q2 FY '25.
→Continuous investment in quality accreditations like CAP and expanding test menu.
→Plans to maintain debt levels to support capex and working capital needs without significant increase in overall debt.

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