Before we begin, I would like to remind all participants that today's call may contain statements that are forward-looking statements, including, but without limitation, statements relating to the implementation of strategic initiatives and other statements relating to Krsnaa Diagnostics' future business developments and economic performance. While these forward-looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties, and other unknown factors could cause actual developments and result different materially from our expectations. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference has been recorded.
I now hand the conference over to Mr. Bharat Celly. Thank you, and over to you, sir.
Hi, good morning, everyone, and welcome to third quarter FY2025 Results Conference call of Krsnaa Diagnostics. Joining us today on the call are Mr. Rajendra Mutha, Chairman and Whole Time Director; Mr. Yash Mutha, Managing Director; Ms. Pallavi Bhatevara, Executive Director; Mr. Mitesh Dave, Group CEO; Mr. Pawan Daga, CFO; Mr. Vivek Jain, Head of Investor Relations. I would like to hand over the call to Mr. Yash Mutha for his opening remarks. Thank you, and over to you, sir.
Hello. Thanks, Bharat. Good morning, everyone. I'm pleased to welcome you all to Krsnaa Diagnostics Ltd. Q4 FY 2025 and the full year FY 2025 earnings conference call. Before we come into today's call, I would like to take a solemn moment to honor the brave soldiers of our nation, those who continue to safeguard our freedom with unflinching courage, and those who have laid down their lives in the line of duty. On behalf of everyone at Krsnaa Diagnostics, I extend our deepest condolences to the families of the fallen. Their sacrifice is a poignant reminder of the resilience and spirit that defines our country. As a public-private partner to governments and institutions across India, Krsnaa Diagnostics stands shoulder to shoulder with the nation, not only in advancing access to quality diagnostics, but in upholding the values of empathy, service, and accountability.
We are not just healthcare providers; we are enablers of hope, especially in times when it's needed the most. Now, coming to our full year performance of FY 2025, I'd like to open up by stepping back and recognizing the unique position that Krsnaa Diagnostics occupies in India's healthcare landscape. We are not built like traditional diagnostic players. While others focus on dense urban markets, retail-led models, and premium price points, Krsnaa is fundamentally different. We are a deep-penetration public-private healthcare infrastructure partner and purpose-built to serve Bharat and not just the urban India. Through our PPP-based model and our integrated offering of radiology, pathology, and teleradiology, we have built a diagnostic platform that is inclusive, scalable, and sustainable, not just commercially, but socially as well.
At Krsnaa, every year is a step forward in our journey, not just as a healthcare company, but as a platform that is redefining access to quality diagnostics in India. As we reflect on FY 2025, it becomes clear this was a year where we demonstrated the strength of our model, the resilience of our team, and the uniqueness of our mission. You've heard us speak before about how the Indian diagnostic space is evolving, but it's worth reiterating that we are operating in one of the most under-penetrated diagnostic markets globally. Organized players like us make up to just 15% of the U.S. $12 billion industry. That number is slowly growing, but the real story lies in how it is growing and who is shaping that growth. At Krsnaa, we believe we are not just following the market; we are helping build it.
We've architected a model that goes far beyond the metro into the very core of India, a model that brings high-quality diagnostics at prices that everyone can afford, prices which are almost 60%-70% lower than the market rate. In spite of these lower prices, we are able to build a sustainable business model with EBITDA in the range of around 25%-27% and profitability in the range of 11%-15%. We don't see affordability and quality as a trade-off; we rather see them as twin pillars. This differentiation has been especially visible in our leadership in the public-private partnerships. Under the Government of India's Free Diagnostic Service Initiative, 12 states have adopted free pathology services, and 19 states have adopted the free radiology services. We have won tenders in eight out of these 12 pathology states and 12 out of the 19 radiology.
That's a 75% win-to-bid ratio, which we believe is unmatched in the industry. These wins are more than contracts; they are trust placed in us by the public health system. In terms of the results, in FY 2025, we delivered a 16% growth in revenue, reaching INR 7,172 million, supported by increased awareness, patient volumes, and pricing efficiency. The EBITDA rose 34% to INR 1,958 million, with margins expanding by 370 basis points to 27%, reflecting strong operating leverage. The net profit grew by 37% to INR 776 million, highlighting our disciplined approach to cost and productivity. What is truly satisfying is how this performance was delivered. In FY 2025, we served over 19 million patients and conducted over 61 million tests, both numbers up significantly from the previous year. This is a direct outcome of our operational maturity, the network optimization, and our expanding digital and teleradiology capabilities.
While our aspiration for the year was to grow in the range of 20%-25%, we have, however, delivered a strong 16% revenue growth, which we believe reflects the resilience of our model, especially in a year where external timing factors were at play. The growth was primarily driven by delays in site handovers for our large Maharashtra CT MRI project and the early conclusion of the BMC project due to budget exhaustion ahead of its contracted tenure. The new BMC tender had revised conditions as well as certain budgetary caps, which we evaluated carefully and chose not to pursue in its current form, keeping the long-term profitability in mind. Additionally, we've also made certain conscious decisions to rationalize exposure in certain regions where receivables were spreading disproportionately, a reflection of our focus on capital discipline and the quality of revenue, not just the volumes.
While the top-line growth came below our aspirations, the quality of revenue improved, margins expanded, and our balance sheet remained healthy, positioning us well for FY 2026 and beyond. What also gives us confidence in our forward visibility is our order book and the upcoming project pipelines. We continue to win tenders, deepen our presence in tier-two and tier-three cities, and activate sites with better productivity timelines. Our younger portfolio is maturing well, with strong ROE and ROC improvements across the cohorts. Alongside the PPP business, our retail strategy has gained strong momentum. Leveraging our PPP infrastructure, we've scaled our retail presence across four states, namely Maharashtra, Punjab, Assam, and Odisha, growing our touchpoints almost 4X in just one year. This is being supported by the in-store branding, wellness campaigns, and the B2B and B2C collaborations across hospitals and nursing homes. It's early days, but the direction is certainly promising.
From a strategic lens, we are executing on five major priorities. The first one, to continue to expand our PPP leadership by participating in new tenders across the underserved geographies. Number two, growing our integrated diagnostic offerings, which include radiology, pathology, and teleradiology under one cohesive operating model, driving sustainable profitability through cost leadership without compromising quality and care, as well as accelerating our retail footprint, especially in high-potential states where we already have built certain brand equity. The last but not the least, we continue to lead on quality with the highest number of accreditations among value-focused players. As we look ahead to FY 2026 and beyond, we remain focused, confident, and optimistic, not just because of what we have achieved, but because of what lies ahead. India is still early in its healthcare transformation story, and diagnostics is one of its most crucial enablers.
Krsnaa is proud to be at the heart of this shift. All of this reinforces what we've always said: we are not building a diagnostics company for the next quarter, but with the multi-pronged strategy and an increased focus on retail, we are building a healthcare platform for the next decade. With this, I now hand it over to our Group CEO, Mr. Mitesh Dave, who will walk you through the retail strategy and the overall operational performance. Over to you, Mitesh.
Thank you, Mr. Yash. A very good morning to everyone. It is my pleasure to walk you through the exciting progress we are making in our retail diagnostic business. Where we stand today and the immense opportunity that lies ahead. Pathology segment, which makes up around 58% of the total diagnostic market, is poised for strong growth with the projected 10%-12% CAGR.
This momentum is being driven by several powerful trends: the growing demand for home collection services due to its unmatched convenience, the rise of preventive diagnostics as a lifestyle choice, and it is starting from now, 30 onwards, 30-50, rapid diagnostic adoption in tier-two and tier-three markets, which are becoming powerful growth engines, and the acceleration of digital diagnostics, including app-based bookings, teleconsultations, and instant digital report deliveries. At Krsnaa Diagnostics, we are embracing this transformation with the energy and ambition. Under our umbrella, we are scaling our retail footprint by strategically leveraging our robust PPP infrastructure. We have successfully launched retail operations across Maharashtra, Punjab, Assam, and Odisha, with the promising early results. The demand for wellness packages is growing rapidly, and our expanding network is building strong brand recall and customer trust as well as connect.
With the best-in-class quality, competitive pricing, and 24/7 availability, RPL is redefining what diagnostics means in India, making it more accessible, more affordable, and more reliable than ever before. Our unique asset-light model gives us flexibility to scale quickly, ensuring we maintain capital efficiency while we are expanding aggressively. The diagnostic landscape is undergoing a fundamental shift, and we are at the forefront of this evolution. Consumers are prioritizing preventive care and embracing digital-first solutions. We are well-positioned to lead in this space by strengthening our B2C presence, by enhancing our network, expanding our retail footprints in metro and high-growth tier-one, tier-two, and tier-three markets where demand is high and supply remains undersold. In addition, we are actively partnering with the corporates to integrate home collection services into the wellness programs, bringing diagnostics closer to where people work and live.
Our investment in education and awareness campaigns is creating a more informed and proactive consumer base. On the network front, we demonstrated very strong growth, growing 4X growth in our network within the first year of operations. This gives us confidence of continuing growth momentum and capitalizing the untapped opportunity across tier-one, tier-two, and tier-three towns. We have also made inroads in specialty segments as well as genomics, expanding our capabilities while maintaining affordability, further reinforcing our commitment to affordable and accessible diagnostics for all. The response to our wellness offerings has been overwhelmingly positive, and our brand is becoming increasingly synonymous with trust, quality, and accessibility. Our vision is bold and focused to become India's most trusted and preferred diagnostic brand across metros and beyond.
To realize this, we are expanding and training our network of phlebotomists to cover both urban and rural geographies, upgrading our digital platforms for seamless booking, real-time tracking, and faster report delivery, optimizing our logistics and lab operations to ensure rapid sample processing and turnaround time. By bridging the gap between advanced diagnostics and accessibility, we are not only enhancing individual health outcomes but also playing a key role in strengthening India's healthcare ecosystem. We are energized by the tremendous potential ahead of remaining fully committed to delivering strong, sustainable growth. At Krsnaa, under RPL, our goal is clear: to be doctors' preferred partners and patients' first choice for affordability anytime, anywhere, built on the foundation of trust, quality, and innovation. With that, thanks everyone, and I would like to hand it over to Mr. Pawan Daga, our CFO, to take you through the financial highlights. Over to you, Pawan.
Thank you.
Thank you, Mitesh. Let me just brief you about the Q4 FY 2025 performance of the company. Revenue for Q4 FY 2025 stood at INR 1,861 million, a 12% year-on-year increase driven by higher volume in both radiology and pathology segments. EBITDA for Q4 FY 2025 stood at INR 542 million, a 23% year-on-year increase with a margin of 29%, reflecting strong operational efficiency. Net profit stood at INR 206 million, with a margin of 11%. In FY 2025, we have achieved revenue for FY 2025 stood at INR 7,172 million, a 16% year-on-year increase driven by growth in both radiology and pathology segments. EBITDA for FY 2025 stood at INR 1,958 million, a 34% year-on-year increase with a margin of 27%, reflecting strong operational efficiency. Net profit stood at INR 776 million, with a margin of 11%, registering a 37% growth year-on-year.
The board has recommended a dividend of INR 2.75 per share, that is 55% of the face value. Taking a closer look at our balance sheet, as of March 31st, 2025, we hold a gross debt of INR 1,655 million, while maintaining a cash and cash equivalent of INR 1,760 million. As of FY 2025, our receivables stand at 128 days, driven primarily by transitional delays in Himachal Pradesh and Karnataka. Encouragingly, all other operating states continue to reflect a healthy receivables cycle, remaining well below 90 days. With the rollout of digitized payment infrastructure, including a unified gateway and RBI-nominated account system, we are already seeing a systematic improvement in the payments. We are confident that, backed by our disciplined connection strategy and strong stakeholder relationships, these receivables' timelines will be normalized, positioning us for a stronger cash flow in upcoming quarters.
With this, we conclude this call and open the forum for questions and answers.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchscreen telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Lokesh Manik from Vallum Capital. Please proceed.
Yes, and good morning to the team. Am I audible?
Yes, yes.
Yes, perfect.
What's your question?
Yes, you can hear me a bit.
Yeah, this is better.
Yes, yes.
Yeah. Yash, my first question was on the radiology business. Somewhere in 2023, we had expanded at a good pace of addition of 20-25 radiology centers, whose throughput we were expecting by 2025. That does not seem to be the case because for one and a half years, we have been growing on the back of pathology. Any delay in the throughput that you can share some details on why radiology is sort of adding on to the top line revenue expectation for the last year? It takes two years for the centers to mature, like you said, you mentioned in the past. You can throw some light on that.
Sure. If you see, there are two factors to it. One is, of course, the pathology project that we had implemented last year has been growing at a faster pace in terms of the ramp-up. Therefore, you see the mix shifting towards pathology versus radiology. On the radiology side, also, the site implementation, like I alluded to in my call earlier, wherein there were certain delays in the site implementation, and consequently, the ramp-up has happened at a slower pace. These are the reasons. What we've seen, just to give you a recent example, in one of our recently put up MRI, where we saw the numbers that we anticipated to come after three months had come in the first few months itself. We are seeing this different trend.
Of course, because we have been radiology-focused, the effort is there to keep on continuing the ramping of our business and operations. In the subsequent quarters, we'll see the radiology contributing at a higher pace than what it was earlier.
Understood. On your slide in terms of the projections for FY 2027, the growth seems to have slowed down. The number of additions seems to have slowed down, especially for the ones on the estimated, which is to be executed. For the projected as well, there are fewer numbers of opportunities that you are seeing. If the market is slowing down, the opportunities are coming down because now they are adding roughly 20 centers on a base of 300. The growth addition then tends to come down.
The market is not slowing down. What we have done is we have been very careful and calibrated in terms of showing what are the realistic numbers. The market, as I mentioned earlier, in fact, from a government policy perspective, the government wishes to have more than 2,000 radiology centers, and we are just in 200. Again, from a guidance perspective as well as from what we see as a realistic outlook and a very selective and calibrated outlook, these are the numbers that we believe are prospects in the making. There are discussions going on, but I would not want to put everything upfront. As and when these discussions mature and as and when the opportunity comes up, and given that they are of value creation and profitability, those numbers will be provided.
As of now, these are some realistic numbers that we expect to conclude in the coming years.
On the heatwave venture, my second question was on the retail venture. By FY 2027, what is the revenue potential that you estimate from this? If you can give a clarification on one slide, it is mentioned we have 250 exclusive centers, and then we also have touchpoints which are going from 1,600 -1 0,000 by 2027. On these three areas, some more clarification, if you can provide, would be helpful.
Yes, certainly. At RPL, we are currently focusing on building the infrastructure through the asset-light models, multiple client-friendly asset-light models, because those are the sure source of the revenues going forward. As and when the centers are started putting up their roads inside, the revenue is bound to be there. It could be way beyond what the market is currently going at. However, giving out the outlook for 2027 revenue numbers, it's a little too early for now because the entire business and the structures and the systems are getting into the place. With the initial one-year centers or the touchpoints that we have formed up, we have laid down across India in the four states. These are pretty promising.
What is the difference between a center and a touchpoint in that network?
Yes. Touchpoints are the ones which are not really exclusive as of now, which eventually, with the services, quality, and the USPs at an RPL that we carry, moving into from touchpoints to the exclusive network.
Okay. So both are connection centers, right?
Both are the revenue-generator centers and are aligned to RPL for trusting them for processing their patient samples or the radiology needs.
Understood. That's it from my side. Thank you so much.
Thank you. Before I take the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Raman KV from Sequent Investments. Please proceed.
Hello, sir. Can you hear me?
Yes, we can hear you.
Yeah. My first question is with respect to the partnership which you announced with MedicaBazaar and United Imaging, wherein you said you'll get equipment from MedicaBazaar, but you'll only pay around 10%-15% of the equipment cost, and the remaining will be paid on a deferred payment basis. What is the interest on this deferred payment basis?
Pawan, besides the interest, the component there is seven percent.
Seven percent.
Yes.
Annually, right? Hello?
Yes, annually.
Okay. My second question is with respect to the guidance and margin. Can you give any volume guidance for FY 2026? In FY 2025, especially in the last quarter, we have seen the margins at 31%. Can we expect the margins to be around 29%-31% going forward? Yeah, again, volume guidance and guidance with respect to the receivables because I have seen that when we compare it, the receivable days, when we compare it to FY 2024, it has increased substantially. Going forward, because the business is mainly B2G, are we expecting the receivables to increase, or will it be stabilized at the current 120 days?
Three parts of the question. In terms of the overall volume guidance, we will continue to deliver results. Whatever we have delivered so far, we expect to have aspirations to cross those levels. With regards to the receivable dates, we are confident with the conversations that we've had with the authorities that the receivable dates will be coming down in the upcoming quarter. There have been certain system implementations happening at the various government fronts, which has also led to some of these delays. We are confident of collecting our deals in the coming quarter. With regards to the margin profile as well, we continue to do a lot of cost leadership as well as initiatives to improve the margins, which we believe will be also increasing in the upcoming quarter.
Can you hear me?
Yes.
With respect to the receivable dates, can you just explain how the receivable dates are calculated? I just wanted to understand the receivable date cycle with respect to this particular business.
Sorry, your voice is not very clear.
I was just saying I just want to understand the receivable date cycle from this particular business perspective.
Typically, the receivables are when we provide services to the government, we submit our invoices to the authorities after the month is over, and then they start paying us. The payment happens in different categories based on invoicing, as and when the process they complete, and then the payment is made. Like I said, in terms of the payment processing, overall, there is an integration of some digitized way of payment that is happening, which will further improve the collections in the coming quarters is what we are given to understand.
I just wanted to know, what are the number of days? What is the—how do I say? Number of days it takes to get payment from government once you receive the invoice?
Yeah, I think we'll discuss the details offline. You can reach out to Vivek, our Head of Investor Relations. He'll share you the details. The collection varies from project to project. We can give you details in detail.
Okay. Thank you.
Thank you. Before I take the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Surya Narayan Patra from Philip Capital (India) Pvt Ltd. Please proceed.
Yeah. Thanks for the opportunity, sir, and congrats for the group set of operating numbers. My first question is on the revenue for this quarter. What we are witnessing, there is a back-to-back two-quarter of an improvement that we have seen, having seen a kind of continuous draft for the last few quarters. What can be attributable to this improvement in the revenue purchase? Is it because of the retail contributing now in a sizable manner and hence this one, or it is a mix between the radiology and pathology? What is driving this revenue purchase improvement?
Yeah. Hi, good morning. First of all, thank you. Thanks for the compliment. There are multiple factors wherein revenue purchases are increasing. Certainly, first is where the retail is getting into the shape and bringing in higher revenue per patient, adding up to the revenue per test going up, number one. Parallelly, within the PPP also, there has been, through the multiple education and awareness campaigns that have been held with the doctors inside the hospitals and as well as outside. The patient's requirement for the advanced test has also started getting prescribed, which in turn both has added to the overall revenue per test increase.
Okay.
Since you're talking about the retail one, is it possible to share that, okay, what portion of our, let's say, fourth quarter revenue would be from the retail side, and what is the revenue share that you are anticipating for, let's say, next year, which will be the first full year of your retail operation? In the opening remark, you have just mentioned about the genomic test venturing into. Could you give some sense about that?
Yeah, sure. To answer that, first of all, yes, in quarter four, quarter four, I should consider it as one full quarter where we can consider retail stepping into the overall four markets, and we have stood close to three and a half percent of the overall revenue for the state. Next year, we are looking somewhere near to five to eight percent around it. Maybe this is our infrastructure, how it behaves with the market dynamics. Answering around the genomic side, yes, these are the specialty segments, and we are very well poised to cater to those high-end specialty needs, which is there into the PPP segment as well as into the retail segment because we have our in-house capabilities to process and to deal with all sorts of genomics, be it related to the gynecology or the neuro or the cardiac around.
Okay. Sir, with your permission, can I ask two more questions, please? One is that radiology centers, see, the projection what you have given, estimates in the projection, and similarly for the pathology centers. It looks like that the focus going ahead is going to be there on the radiology side and may not be pathology. This is a kind of a strategic thought process, or our tender anticipations are more around the radiology. That is what is our thought process here, if you can clarify that one. The second one is that even accreditation aspect, see, what I'm seeing is that with the 51 number of accredited labs, Krsnaa is having the largest number of accredited labs in the country, even better compared to the peers, other peers.
What advantage are we getting here because we are anyway catering to the government hospitals, public hospitals, through accreditation? What increment is it that we are going to get from it?
Two parts of the question. The first part with regards to with the focus on radiology. Currently, if you see in the last year, there were various pathology projects that Krsnaa implemented, whether it was Assam or Odisha. Whereas in the coming quarters, we see a lot of radiology tenders in the pipeline, and therefore, we have considered a higher share of growth coming from the radiology business. As I said, tomorrow, any government decides to publish or come up with a pathology tender, we will look at these opportunities and accordingly, the numbers from a prospect perspective could change. As of now, yes, we see opportunities coming more on the radiology side. To answer the second part of the question with regards to NABH or NABL accreditations, it's a two-fold strategy. The first is, as I mentioned in my call earlier, Krsnaa continues to focus on quality.
Instead of being in PPP, we always ensure that our centers are NABH, NABL accredited, which establishes a level of quality as well as a level of trust and confidence in the system. That is basically Krsnaa's ethos when it comes to providing quality diagnostics at prices which everyone can afford. Apart from this, this also brings in a lot of confidence both for the doctors inside the hospital as well as the doctors outside the hospital, which we have seen over the last many years where patients and private walk-ins have continued to increase year on year. The last but not the least is, of course, wherever NABH, NABL accreditations happen, we are also able to have certain price advantages when it comes to the PPP side.
It's a multi-pronged strategy, but at the core lies that Krsnaa is focused on quality and delivering good quality diagnostics to its patients when it comes to its centers.
Sure, sir. Thank you. Thank you.
Thank you. The next question is from the line of Aditya Chheda from InCred Asset Management. Please proceed.
Hi. I have two questions. One, if you can talk about the receivables which are at INR 2.77 billion, just in Himachal and Karnataka, what would that number be? The second is on the mix of pathology and radiology today for us, and whether the volume growth number that we've reported of 38% versus the revenue growth of 16% is attributed to a higher pathology mix versus FY 2024.
Hi, Pawan this side. The receivables for Himachal and Karnataka stand at 150 days in total. Could you repeat the second part of your question?
Can you talk about the pathology and radiology mix that we have on FY 2025 revenue?
Which is at a 50%-50%.
Got it. Thank you. One question was that since we have been reducing exposure in these two states, what is the kind of growth that would have happened? In your initial remarks, you mentioned three reasons, which is DMC and site delay and reduced exposure. What kind of growth would have been sacrificed because of the receivable issue?
The growth impact that we would have had impacted because of these is around between four to five percent. Again, which is a conscious call considering the procedural delays and whatever. From an upcoming year perspective, we see that the growth momentum will be back on its track.
Got it. The question was on the test performed, which shows a 38% increase year-over-year on slide number three versus the revenue growth of 16%. Wanted to understand if this is because of higher pathology test, which would be thus a higher volume growth but a lower revenue growth.
If you see, the combination is both. It's because the business mix is again 50%-50%. So both on the radiology front as well as on the pathology front, the numbers and the volumes are increasing, which has led to this kind of revenue growth.
Okay. Got it. That's it from my end. Thanks.
Thank you. The next question is from the line of Pranay Khandelwal from Alpha Invesco. Please proceed.
Yeah. Hi. Good set of numbers. Congratulations on that. I had two questions. Wanted to know, can you give me when you provide us the share of the cash versus credit business that we do, as in wherein tests are being paid for upfront and versus tests for which the government compensates us? That is my first question.
The cash component of this is around 20%, and the credit is around 80%.
Okay. The cash is 20%. I believe this number was higher before, 30%, was it? Or was that the private walk-ins?
No, no. It varies between 25%-30%. Like I said, since the pathology contracts have also contributed revenue, therefore the credit has also increased.
Okay. Okay. So this 20% is for FY 2025 or Q4?
Sorry, could you repeat the question?
This 20% that you gave for the cash business, this is for FY 2025 or Q4 FY25? Is it quarterly or is it annual?
No, no. This was for the annualized level. This is at the annual level.
Annualized level. All right. All right. Thanks. Another just clarifying question. There is a sale of fixed assets of about INR 15 crores. Have we closed down any centers and sold off equipment? I mean, does this relate to BMC or something I read? Can you give a clarification on that?
Hi, Pawan this side. We have sold one or two equipments, which the tender tenure for one of our projects has been completed, which is very small in overall size of our business. That is why the reason this sale of effects was taken place.
Okay. So two centers closed down. Which state exactly, if you can give that?
One is in Madhya Pradesh and one is in Tamil Nadu.
Okay. Okay. All right. Thank you. That'll be all.
Thank you. The next question is from the line of Dhamil Desai from Turtle Capital. Please proceed.
Hi. Good afternoon, everyone. My first question is on receivable. I think on this receivable side, it's been a sticky number, and for the last two, three quarters, we've been hoping that we would recover from, especially from Himachal, it's been going on since the elections there. What is the bottleneck there, and what gives us confidence that things will normalize going forward in the near future?
If you see, these are two large states in terms of HP and Karnataka only compared to all the other states. Both the states, if you look at it from the NHM fund allocation and certain procedural aspects, is where we are experiencing the delays. Just to give you a perspective, there have been issues with NHM giving down the funds to different states because of certain procedural requirements.
This is one of the reasons that we understand where these two states are experiencing challenges. As I said, as of now, whatever you understood is they have to get certain things in place because of the digitization way of payments that is going to happen where it is going to be through RBI nominees' accounts. Both the authorities are working to get those systems in place. Hopefully, then the receivables, what we understand, will come down in the coming quarter.
Okay. Got it. Second question is on Maharashtra radiology. If I understand from the numbers that you have given, probably we have implemented two more in this quarter. A large part of that is yet to be implemented through probably FY 2026. Two parts to the question. One is that what are the challenges why we are going slow on the execution side? Second, going into FY 2026, the growth essentially will come from the younger centers, which will grow at a higher rate, but the mature, which will grow at a lower rate. Kind of should we factor in a much lower growth of 15% rather than 25% that we were targeting? How should we look at the margin?
Hi, Pawan this side. The first part of your question, where this Maharashtra city MRI projects. The delays, as Yash has already mentioned, are because of the site handover and the site delay and the power connection and the readiness of infrastructure. The sites are ready. Certain sites are ready. In a couple of quarters, we are expecting approximately 15 centers to be live in the first half of the year in next financial year at a Maharashtra city MRI project. Now, coming to your second part of the questions, the center's maturity in the radiology side takes approximately one year to two years to mature. One and a half year onwards, we see it in good traction.
Yeah, centers which have been deployed in the last this year, first half and the second half of this year will start maturing in a couple of quarters and maybe in the third quarter of this financial year. We try to maintain as our growth things which are there, which will further improve or so on.
Just in terms of what Pawan just mentioned, the growth aspiration or the numbers that we see will, of course, our aspiration will surpass the growth that we've given this year and continue on the growth momentum. Given these implementations that are expected to roll out in the upcoming quarters, as well as both on the retail front, we have strong confidence of surpassing the numbers that we've delivered so far.
And margins?
The margins will continue to improve. As I said, there are different initiatives that we've done at both in terms of operations, in terms of the businesses that we are entering into. We expect the margins to improve going forward as well.
Okay. So just to sum it up, essentially we are targeting 16%+ growth and similar or better margins going into FY 2026, right?
Yes.
Okay. Okay. Thank you.
Thank you. The next question is from the line of Parikshit Kabra from Pkeday. Please proceed.
Hi. Thank you for the opportunity. Just a few clarificatory questions. I'm not sure if I heard them right or not. Did you say that the HP and Karnataka receivable days were 150 days? Is that right?
It is 150-plus kind of days for Karnataka and HP.
Right. Because the reason I'm asking is that at the company level, we are at 140, but the rest of the states, we are at 90. So how does this add up?
No, no. I maybe misinterpreted this thing. Our outstanding with Himachal Pradesh and Karnataka is in the range of INR 140 crore-INR 150 crore.
INR 140-150 crore. Okay. Okay. Okay. That makes sense. Okay. Secondly, again, I'm not sure if I misheard it earlier in the conversation. Did we say we are not participating in the BMC tender?
Yes. As I said earlier, we had won the tender, but when the authorities changed the tender scope and they asked for rebidding, there were certain conditions, including the turnaround time as well as budget capping, which in our opinion is not a very profitable tender to pursue. Therefore, we decided not to take it up.
Got it. Clear. Lastly, can you give us, I understand that there's a lot of balls in the air right now about the receivables from Karnataka and Himachal. Do you guys have a target in mind as to what will be your receivable days at the end of Q1 FY 2026?
FY 2026?
Yeah. Basically, next quarter, what will be your target?
FY 2026? Yeah. We are hoping it to be in the range of about 100 odd days. If it comes down significantly, in fact, the upcoming quarter is where we expect the receivables to come down significantly. Just to give you on a ballpark basis, we expect it to be in the range of about 100 odd days, 90-100 days by FY 2026.
Q1 we are talking about, right?
Yes. Q1 is where we are expecting sizable receivables to come through, and which will further come through this coming quarter.
By the end of this quarter, you'll be at 100 days receivables. That's great.
No, no. I said 100 days is at the end of FY 2026. In the coming quarters, we're expecting a significant portion of our receivables to be collected.
Understood. Do you have a number for the coming quarter? That's what I'm trying to understand. Because today it was 140.
Yeah. As I said, in the coming quarter, since the discussions are going on, it will be too early for me to give an exact number. Hopefully, we'll share updates as and when the money gets ready.
Okay. Understood. Thank you. Thanks a lot.
Thank you.
Thank you. The next question is from the line of Subrata Sarkar from Mount Intra Finance. Please proceed.
Yes. My question on the Rajasthan state, basically, what is the progress on the dispute? Is there any progress or any light on that? If you could highlight that.
The matter is currently under process as well, and we are hopeful that there will be an announcement or update very soon.
Okay. Any big few tenders that are in our pipeline, if you can highlight on that a little bit, give some at least qualitative direction for other states or?
There are various opportunities that we are working, but the details we won't be able to provide because of the competition intensity. There are various opportunities that we are pursuing as of late.
Okay. No worries.
Thank you. The next question is from the line of Bhagwat from Prosperity Wealth Management Private Limited. Please proceed.
Thank you for the opportunity. Could you please provide an update on the status of the income tax demand order received for previous years? Your comment on the same?
Yeah. The demand orders were received. Like you mentioned, after going through the merits and facts of the case, we have a very strong opinion that these are all which we can defend. Therefore, we filed an appeal with the authorities in rejecting these claims. The process is now on where it goes to the appeal stage.
Okay. We are hopeful that we will not have that much liability as the demand raised.
Yes, absolutely.
Okay. Okay. My second question is just a fundamental question. Despite our state prices being significantly lower compared to our peers, our EBITDA margin is similar to them. Could you please comment on the main reason for that?
That's the uniqueness of our business model based on the different cost leadership we have, the model that we build. In fact, I would put this question if you compare the other players in the market, in spite of higher prices, have the margin that we are able to deliver. So Krsnaa today has created a unique business model which leverages a sense of technology-led solutions, the unique PPP-driven model, as well as the various cost leaderships that we have built over the years, which allows us to have these sustainable margins.
Okay. So this is mostly related to the cost efficiency that you mean?
Correct.
Okay. Okay. Thank you for that.
Thank you.
Thank you. The next question is from the line of Deepali Bansal from Ventura Enterprises. Please proceed.
Good afternoon. My first question is regarding the revenue bifurcation. Would you be able to provide us what is the revenue bifurcation between matured and semi-matured businesses?
I think these are details which we will be able to provide offline. Vivek will reach out to you to share these details.
Okay. Next question would be, would you be able to explain the whole retail business structure? What is the touchpoint? What is B2B? And what are exclusive stores? Because I'm not able to understand how is this going to work for us.
Yeah. Hi. Morning. Mitesh is right. The entire retail structure is basically a 360-degree structure where we are moving into the space where we are well poised for growth through our existing ecosystem of PPP. We are trying to leverage all the dimensions, right from B2B, B2C, as well as the other business model, along with the various verticals within the B2B and B2C. While in one of the previous questions I mentioned, if you just want to understand, the areas where it is direct to the consumer fall under the B2C, the areas which are directly with the client are the B2B. Touchpoints are the ones where we are having active revenue contribution coming out from the clients. The network is the one which is exclusive to us.
Okay. Okay. Thank you. My final question would be, what is the management feeling? What does the future look like? Are there any problems that we are facing? Any logistical issue? Any bidding issues? Anything that can cause a problem to the company in the next maybe, let's say, three years or three months?
Sure. As I said in my call as well, today, if you look at it from the fundamentals of what Krsnaa has built, we do not see any problems in the business. Our business continues to thrive. We've been demonstrating growth, which is almost higher than what the industry is able to deliver. Our prices, which are almost more than half of the prices that the market is offering, our margins are sustainable, and they continue to improve. Along with this, we also have forward into retail with the network expansion going almost four times within just one year. From an overall model and business perspective, as well as the outlook that we have with so many centers that are under implementation, which will further add to our revenues and our margins in the upcoming quarters.
In fact, I see this as a strong fundamental that we've built, and we look forward to harnessing this in the coming quarters.
All right, sir. Thank you.
Thank you.
Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please proceed.
Yeah. Am I audible, sir?
Yes, yes.
Okay. Yeah. Thank you very much for this opportunity. I just wanted to understand on the receivable part, which you mentioned around INR 140-150 crore to HP and Karnataka. Do you see any risk of any kind of provisioning coming out of these receivables in future? Any kind of comment would be fine.
No, no, no. If you see both from the process that we follow in terms of collecting our receivables, the kind of discipline that we have, we do not see any risk in terms of having provision because not only us, even the auditors have evaluated this. Based on whatever communications we have had with the authorities so far, we are confident of recovering our entire due. As I said, these are only two states which have had a certain challenge. Otherwise, we do not see any risk even on the current Himachal Pradesh and Karnataka receivables that we have. Hopefully, in the coming quarters, we expect the amount to be recovered in full.
Yes.
Understood.
I would say that for the Pawan side, till the date, whatever we have built, we have received. Till the date, we have zero bad debt in our books, such was. If we're talking about the provisioning part, based on the accounting standard and ECM, we have provided whatever the provision is required as per accounting standard and the company policy, which is already taken in the P&L part.
Okay. I got it. Understood. My second question is around about your retail business, B2C. I mean, is it margin accurate? I mean, the margins there are higher than the other B2B business?
Yes. Certainly. Looking to the pricing at which we are playing or moving into the market, it has a better margin.
How much better? I mean, can you say?
Despite being almost 30%-35% better to the peer player.
Okay. Okay. So how much is the margin differential between? I mean, if your company-level margin currently is in the range of 26%-27%, excluding the other income, so their margin would be what, 30%-35%?
Since you know that it's just two full quarters from which we have ventured out into the retail, there is a coming time wherein we'll be able to evaluate B2B, B2C contribution, and within that, various vertical how it contributes because margin at each vertical and line of business, it changes. It's too early to predict that way. However, it is better than the existing one. How much it is, is going to be the future story.
Understood. Fair enough. Pricing also is higher than what you offer in your PPP model, right?
Yeah. Certainly. It is way better than our PPP model. Despite that, we are still 30%-35% discounted, or I should say lower than the peers.
Okay. Understood. Given the outlook that we have in terms of touchpoints, I think 4,000-10,000 kind of a range for FY 2027. How do you see this B2C revenue mix over next maybe two years or five years, whatever? I mean, some understanding would be helpful.
Yeah. B2C will always be around four percent when it's going to be the revenue mix in the overall retail space. It's always the apprehension or aspiration is to be somewhere near to 70%-30% B2C, B2B mix. That's where we are currently working towards.
30% B2C revenue mix in five years? Would that be a fair assumption?
70%, 30%. B2C is to B2B.
B2C, we are targeting 70%?
Yes. B2C, we are targeting at 30%. That is where our entire efforts and the individuals are.
Okay. Currently, it is only about, I mean, this year, we are targeting five to eight percent, right? FY 2026.
Correct. Correct. Correct.
Okay. Okay. But your B2B will also grow. I mean, but B2C will grow much faster than your B2B. So you are envisaging such a high increase in your mix rate.
Perfectly.
Okay. Okay. Fair enough. I got it. That's very helpful, sir. I mean, that's it from my side. All the very best to you.
Thank you.
Thank you. The next question is from the line of Chirag from Keynote Capitals. Please proceed.
Yeah. Thank you for the opportunity. Most of my questions are answered. I just have two questions for now. One is, once you expect the receivable recovery from the Madhya Pradesh and Karnataka, are we expecting it to reduce the working capital debt that we have by the same amount, or?
Of course. Yes. As I said, considering the discussions, we expect the receivables to be collected in the coming quarters, which will also ease up on the working capital requirements.
Right. Secondly, as you mentioned that this year, our radio and pathology mix is 50/50. Could you just let me know what it was in the last year?
Last year, it was 60/40. 60 is radiology, and 40 was pathology.
Fair enough. Fair enough. That is it from my side. Thank you.
Yeah. Thank you.
Thank you. The next question is from the line of Amrita from Wealth Managers. Please proceed.
Thank you for this opportunity. I just have two questions. One is regarding the number of labs. As in, in the presentation, it was mentioned that the number of labs as of March are 117, whereas as of December, it was 121. I would like to know which reasons for these reductions and/or are they pertaining to BMC projects? My second question is regarding the CapEx. The CapEx is somewhere at INR 111 crore compared to INR 193 crore last year, which is for FY 2024. Could you please give some clarity on that? Thank you.
Hi. Pawan this side. We have discontinued a few labs, smaller labs in different regions because of operational efficiency and basically in the cost measures and optimize the lab efficiency at a bigger scale. The second part of your question, which is in INR 111 crore of the CapEx, is mainly for the new centers of radiology in Madhya Pradesh and Maharashtra. Also, one is in Delhi, the MRI in the city, and a certain portion of a pathology collection center in Assam collection centers and the Odisha collection centers. These are the CapEx outlay for the year.
What kind of CapEx do we have for the collection centers? If you can give some idea on this.
Collection centers, the basic infrastructure which is required to have a refrigerator, maybe the basic test equipment related to the testing. And that's it.
As such, just to add one more.
How much per center?
As such for collection centers, there will not be much of any CapEx requirement because we are as such moving with the asset-light model. There will not be any as such. Related to our collection center under PPP, the volume and the number of collection centers are in the range of thousands. If we add up in total, the capital outlay is there, but at the individual collection center, there is no huge amount of CapEx required.
All right. Thank you.
Thank you. The next question is from the line of Siddhartha from Caprize Investments. Please proceed.
Hi there. I have got a couple of questions. One, I mean, what was the reason, I mean, in the last con call as well, we have given certain targets and we have built it. I just wanted to understand what exactly is the reason behind not delivering upon our promises earlier?
Yes. Like I mentioned earlier, when we had given the guidance, there were certain, like the BMC tender, we had already won, and we were expecting that to roll out. When the government changed certain scopes, they brought in conditions like turnaround time of four hours as well as some budgetary caps, so we decided not to pursue that opportunity. Along with it, there were certain delays in our tight ramp-up. Of course, the conscious decisions to reduce the business in certain areas where the receivables were tightening up. If you look at it, it was a conscious call on all these fronts where we just did not want to increase or do business, which is not value-accretive or which does not really create profitable margins for us. Therefore, we fell short of the guidance.
However, if you see on an overall basis, we have still been delivering a good growth rate for the company as a whole.
What is that? And also, could you give us some breakup about, I mean, breakup of what is the revenue per center for both your radiology as well as pathology segment?
Those details, we'll be providing you offline. Vivek can share those details with you.
Okay. Also, last point, sir, our return metrics, our ROC and ROE look quite stealth right now. Going forward, I mean, with our B2C business kicking in, do you think, I mean, what do you think this figure might look like going forward?
Sure. When you look at the ROC and ROEs or these ratios, that is from a point in time because there is a certain investment that happens from a financial statement perspective, whereas the commensurate revenue has not come through. For example, today, there are a lot of additions that have happened into our growth block, but the revenues will come in the subsequent quarters. From that perspective, it does look surprised. If you look at it even from an overall balance sheet perspective, the ROCs and ROEs have been improving year -on- year, quarter- on- quarter. In the upcoming quarters, as the business matures, as the younger centers start maturing, they will further contribute to the improving margins.
Yes, with a blended return on the retail side, we expect the margins to improve as well. Retail will take its own time because as Mitesh pointed out, we are currently at the infrastructure stage setting up the different touchpoints. As they continue to improve and contribute revenues, that will certainly improve the margins going forward as well, and the return ratios therefore.
Got it. Thank you.
Thank you. The next question is from the line of Surya Narayan Patra from Phillip Capital (India) Pvt Ltd. Please proceed.
Yeah. Thanks for the opportunity, sir, once again. Just one question that I wanted to clarify. What is the investment plan now that we are having for FY 2026 and the target areas of investment? Because I do believe, given the asset-light model, what we have recently adopted, led by that, possibly our investment requirement for the following period would come down meaningfully. If you can give some sense about it.
Yeah. From an overall CapEx perspective, while we still have about INR 100 crore-INR 150 crore of investment, yes, from a cash flow perspective, given this different model that we put in place, the requirement to deploy upfront capital will not be as significant. We continue to leverage different models to bring in the asset-light model into place.
Given the various tenders that we already have won, and which are sizable tenders at very good rates, these investments, at least for the next year, would be in the range of about INR 100 crore-INR 150 crore.
In practical cash outflow, would we see less than INR 100 crores?
Sorry?
Yes. Practical cash outflow.
Yes, yes, yes. Significantly lower than INR 100 crores.
Got it. Yeah. Okay. Thank you.
Thank you. Ladies and gentlemen, considering time constraint, we would not be able to take any further questions. Now, for closing comments, I hand the conference to Mr. Yash Mutha. Over to you, sir.
Thank you. Thank you, everyone, for joining us. 2025 earnings call. Hopefully, we were able to address all the queries. If any questions remain unanswered, please feel free to connect with our Investor Relations team's Head, Mr. Vivek Jain, and looking forward to interacting with you again in the future quarter. Thank you.
On behalf of Equirus Securities Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.