Ladies and gentlemen, good day and welcome to Krsnaa Diagnostics Limited Q4 FY 2026 earnings conference call. I now hand the conference over to Mr. Bharat Saluja from Equirus Capital. Thank you and over to you, sir.
Thanks, Steve. Good day, everybody. Hi, on behalf of Equirus Securities, welcome you all to quarter four FY 2026 results conference call of Krsnaa Diagnostics. Today with us, we have Mr. Rajendra Mutha, Chairman and Whole-Time Director, Mr. Yash Mutha, Managing Director, Mr. Mitesh Dave, Group CEO, Mr. Chandra Prakash , Interim CFO, and Sujoy Bose, Head Secretarial, Legal, and Compliance. I would now like to hand over the line to Mr. Yash Mutha for opening remarks and subsequent to which we will have a Q&A. Thank you. Yash, over to you.
Thank you, Bharat. Good afternoon, everyone, and thank you for joining us. At Krsnaa, we are not building just another diagnostics company. We are building a diagnostic platform for Bharat, working closely with governments to strengthen public healthcare infrastructure and improve access to high-quality diagnostics across the country. At the heart of this mission is a very simple belief. Quality diagnostics should not be a privilege limited by affordability or geography. Through our PPP-led model, millions of patients, particularly from the economically weaker sections of the society, are able to access advanced diagnostic services either at highly affordable prices or completely free of cost through various government healthcare initiatives. In many ways, that is the true purpose behind the platform we are building. From the very beginning, Krsnaa consciously chose a different path from the conventional diagnostic players.
While most diagnostic businesses historically followed an asset-light, urban-centric, and pathology-led model, Krsnaa built an integrated radiology and pathology platform leveraging the PPP route, working with the government to serve absolutely underserved geographies. In that context, comparing Krsnaa with traditional diagnostic model alone does not fully capture the scale, purpose, and the long-term structural value of the platform we are creating. This is undoubtedly a more difficult and capital-intensive model to build. It requires investments in infrastructure, advanced medical equipment, technology systems, logistics capability, and skilled healthcare manpower, along with the number of radiologists and qualified pathologists. This very complexity is what creates Krsnaa's differentiation and the long-term moat, because once such infrastructure is built at scale, it becomes extremely difficult to replicate operationally, financially, and structurally.
Additionally, given the nature of a model where capital deployment happens upfront while the utilization and monetization follows over time, our reported return ratios such as ROC and ROE during the expansion phases may not fully reflect the underlying operational potential of the platform being created. As these assets mature and the utilization scales up, we believe the operating leverage inherent in the model becomes significantly more visible. What makes Krsnaa unique is the combination of integrated radiology and pathology capabilities, deep PPP presence, 24 by 7 operational capability, high affordability pricing, and the ability to deliver diagnostics at population scale while maintaining strong margins and quality standards. That is where Krsnaa stands apart. In line with this strategy, Krsnaa is cumulatively deploying nearly INR 5,000 million of CapEx across Rajasthan, CT MRI expansions, retail infrastructure, and associated backend systems.
Against this, the company now has a long-term revenue visibility both from the existing operations and the newly secured business aggregating to nearly INR 6,000-7,000 crore over the next five-seven years. That, in our view, is a very important reflection of depth, scalability, and long-term visibility embedded within the platform we are building. Coming to the FY 2026 performance, our revenues stood at approximately INR 7,728 million. The EBITDA stood at approximately INR 2,149 million with margins of around 28%. Our reported PAT grew significantly to approximately INR 1,014 million, and the Q4 reported PAT alone stood at approximately INR 417 million, growing over 101% year-over-year. Importantly, this performance was delivered while simultaneously executing one of the largest diagnostic infrastructure expansions undertaken in the country.
Today, Krsnaa operates 190+ CT and MRI centers, 147 pathology laboratories, more than 4,700 patient collection centers presence across 18 states and union territories, supported by 350+ radiologists, 100+ pathologists, and 3,000+ healthcare professionals. In FY 2026 alone, we processed nearly 59 million tests and served approximately 20 million patients. These are just not numbers. These are millions of clinical decisions enabled by Krsnaa's infrastructure. Importantly, we have achieved this while delivering diagnostics at prices which are nearly 70% lower than the prevailing market rates while maintaining margins comparable to some of the best players in the industry. India 26 PPP Rajasthan is now substantially implemented with 27 mother labs and 800-plus collection centers being rolled out across districts. Upon completion of our existing order book, Krsnaa will cross 200+ CT MRI centers, an important milestone making us one of Asia's largest radiology platforms.
The radiology infrastructure, the pathology integration, the logistics capability, and the doctor network, along with technology systems and the statewide execution, create a very strong and long-term moat. The second engine for Krsnaa is our retail expansion leveraging PPP infrastructure. Unlike conventional diagnostic players who build retail through heavy incremental investment and customer acquisition costs, Krsnaa's strategy has been to leverage the deep diagnostic infrastructure we've already created through our PPP network across the country. Retail today contributes approximately 8% of the company's revenues and is increasingly contributing towards improving the overall cash profile of the business. Strategically, we believe that retail has the potential to become a very meaningful long-term growth and cash flow driver for Krsnaa. Our strategic investment in Apulki Healthcare has been in the right direction.
The value gain of approximately INR 222 million during the year validates our investment thesis around integrated tertiary healthcare and long-duration healthcare infrastructure partnerships. More importantly, Apulki positions Krsnaa within the oncology and cardiac care ecosystems, which we believe represent a very significant long-term healthcare opportunity in India. We also remain sharply focused on collections and working capital discipline during the year. In the half year alone, collections stood at approximately INR 2,910 million, including INR 1,580 million in Q4, the highest quarterly collections in our history. 14 years, virtually zero bad debts. That reflects the underwriting discipline and execution culture embedded across the platform. Krsnaa is built around accessibility, infrastructure efficiency, affordability, and population-scale healthcare delivery. We are building a healthcare infrastructure that serves millions of patients across India.
Given the nature of PPP business, implementation timelines and project tenures can create variability across individual periods. However, if one looks at Krsnaa's journey over the years, the company has continued to grow consistently. The headline numbers themselves reflect the strength and resilience of this model. Over the last couple of years, despite certain projects completing their tenures, revenues from these projects tapering off, and implementation timelines in some large projects taking longer than anticipated, Krsnaa has continued to grow consistently while simultaneously expanding infrastructure and investing for the future. In context, during the last five years period, Krsnaa has recorded an approximately 12% revenue CAGR compared to around 8% sales CAGR for the broader diagnostic peer group. In many ways, that itself is a validation of the scalability and resilience of the platform that we have built.
Tenders and project cycles will continue to evolve over time, but what Krsnaa has created today is far larger than any individual contract. It is a deep, integrated healthcare infrastructure platform with strong execution capability, significant entry barriers, and long-term public healthcare relevance. That is why we believe the long-term potential of the platform still remains significantly underpenetrated. If I step back and look at Krsnaa today, I believe the company needs to be viewed not merely as a diagnostics business, but as a national healthcare infrastructure platform serving Bharat at scale. In many ways, Krsnaa sits at this intersection of healthcare, infrastructure, and nation-building, and I believe the full potential of Krsnaa is still unfolding. With this, thank you. Now, I now hand over the call to our Group CEO, Mr. Mitesh Dave, to walk you through further updates on retail and the operations. Over to you, Mitesh.
Hi. Good morning, everyone. I am Mitesh Dave, Group CEO, Krsnaa Diagnostics Limited, welcoming you all today in the quarter four earnings call. Thank you, Mr. Yash, for sharing details and the insights for FY 2025/2026. Now as we close FY 2026, I'm pleased to share that this has been a year of disciplined execution, strategic expansion, and strengthening of our long-term fundamentals. Despite a dynamic operating environment, Krsnaa Diagnostics has continued to deliver resilient growth while steadily improving operational efficiencies, expanding retail presence, and strengthening cash flows across the businesses. During the quarter four, our revenue from operations and sales stood at approximately INR 1,926 million, representing year-on-year growth of around 4%, sequential quarter-on-quarter growth of nearly 7%.
EBITDA for the quarter stood at approximately INR 559 million, with the EBITDA margins of 29%, reflecting the efficiency and strength of our operational discipline along with the scalability of our integrated diagnostic platforms. One of the most encouraging development during the year has been our focused effort towards improving collections and strengthening working capital efficiency. Through the sustained engagement, disciplined receivable management, and tighter execution across the projects, we have successfully reduced our DSO from 155 days in quarter three to 139 days at the end of the quarter four FY 2025/2026. This reflects not only improvement in cash conversion cycles, but also reinforces our sharp focus on building a healthier and more sustainable balance sheet. Our retail diagnostic business continues to emerge as a very strong strategic growth engine for Krsnaa. Retail diagnostics in India remains massively underpenetrated, especially outside metro cities and Tier 1 towns.
Patients are looking for transparent pricing, reliable reports, quick turnaround times, and a healthcare experience that feels simple and accessible. This is where we believe our model creates long-term value. Quality and execution continues to remain the center to our organization. Today at Krsnaa, we operate with 54 NABL accredited labs, 54 NABH accredited radiology centers, India's first ACR accredited teleradiology platform, India's first CAP accreditation pathology laboratory in a government facility. The journey for retail started approximately a year before, and within a year, retail contribution for FY 2026 stood at approximately 8% of the overall revenue, in line with our strategic roadmap. More importantly, the underlying momentum continues to remain extremely strong. Today, our retail network has expanded more than 3,500+ touch points across the country, including 500+ franchises and collection centers across five states.
Our foray into specialty segment in certain selective geographies strengthens our presence in strategically important markets, and we continue to see encouraging tractions across Maharashtra, Punjab, Assam, Odisha, and Himachal Pradesh. Going forward, we remain highly optimistic about opportunities ahead for FY 2027. We expect retail contribution to further scale up to double digits, supported by strong network expansion, deeper customer engagements, and increasing adoption of preventive healthcare and wellness services. With our asset-light model, operational expertise, and growing brand credibility, we believe Krsnaa is well-positioned to outpace industry growth and deliver sustainable long-term value creation. In FY 2027, as a part of our strategic growth initiative, we are also exploring opportunities to expand in newer geographies beyond our existing PPP operational states through strategic alliances and selective acquisitions.
We will continue to strengthen both our PPP and retail business while steadily building one of India's most trusted, accessible, and future-ready healthcare diagnostic platforms. With strong fundamentals, improving unit economics, a rapidly expanding retail footprint, and a highly committed team, we are entering FY 2027 with confidence, clarity, and large long-term vision for scale. With that, I would now like to hand it over to call for the financial highlights to our Interim CFO, Mr. Chandra Prakash. Thank you very much.
Thanks very much, Mr. Mitesh. Good afternoon, everyone. A very warm welcome to the Quarter Four and full year FY 2026 earnings conference call of Krsnaa Diagnostics Limited. Myself, Chandra Prakash , I'm the interim CFO of the company, and it is my privilege to walk you through the financial performance for the quarter and full year ended March 31st, 2026. FY 2026 has been a year of systematic execution and milestone achievement for Krsnaa Diagnostics. We have achieved a sales of INR 778 million against the previous year sales of INR 7,171 million. We crossed INR 1,000 million in reported PAT for the first time and achieved a reported PAT of INR 1,014 million against the previous year PAT of INR 776 million.
We achieved EBITDA margin of 27.81% on full year basis. Our EBITDA grew to INR 2,149 million against last year EBITDA of INR 1,958 million, representing a growth of almost 10%.
Our retail business scaled from almost INR 10 crore in FY 2025 to INR 60 crore in FY 2026, which is a six-fold growth in a single year that firmly establishes the consumer appetite for Krsnaa's brand of affordable and quality diagnostics. Our working capital situation is improving steadily. Collection of INR 1,580 million in Q4 FY 2026 was our highest for the year. Just to clear the recovery trajectory, we are going to increase it further. Our receivables stood at 139 days against 155 days in the previous quarter. Our improvement journey to sub 120 days guided for FY 2027 remains on track. Just as said by Mr. Mitesh, I wanted to reiterate this again, that we have maintained our unblemished record of virtually zero bad debt since inception. The timing delay are administrative in nature, not a credit risk issue. Our balance sheet remains healthy.
Our borrowings include NCD issued to ADB worth INR 4,300 million, term loans, and working capital. We continue to fund our growth through a combination of internal accrual, operational cash flows, and efficient vendor finance CapEx model.
Capital allocation remains at the heart of our growth strategy. We have planned a total capital investment of INR 5,000 million in FY 2027, which includes both the carry-forward commitments from FY 2026 and fresh investment in FY 2027, which includes both Rajasthan and our projects in radiology and other projects. Looking ahead, we see FY 2027 as the year in which all the investment we have made come together. Rajasthan in full swing, retail achieving the breakeven and accelerating to next level, new MRI adding to radiology base, adding to the next layer of long-term growth. The foundation is strong, the execution track record is proven, and the opportunity ahead for us has never been larger. Last but not the least, I'm happy to share that the board has recommended a dividend of INR 2 per share, that is 40% of face value.
With that, I would like to conclude the CFO's opening remarks. We are deeply grateful for your continued confidence in Krsnaa's journey. I'm now inviting the moderator to open the floor for your questions. Thank you.
Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes on the line of Balam urali Krishna with Oman Investment Advisors. Please go ahead.
Hi, good morning, everyone. I want to know any contribution from Rajasthan in the current quarter numbers and also how the ramp-up will take place in this financial year from Rajasthan. By Q3, we can expect by H1 will be at full pledge.
Hello, Krishna. Good afternoon. In this quarter, there was no contribution of Rajasthan. We were all in the phase of establishing the labs and the collection centers. We see Rajasthan contribution coming in from Q1 FY 2027. The revenues have started coming up. The entire installation is expected to be completed majorly within Q1 and some bit of it flowing into Q2. By Q2, we expect all the installations to be completed.
What could be the revenue potential from Rajasthan in this year?
Rajasthan, we believe the revenue potential to be in the range of about INR 100 crore-INR 150 crore on a full year basis.
Follow up on that one. Earlier, we were expecting around INR 250-300 crores. Why there is a difference being a first year, or is it same kind of revenue we can expect it going forward also?
From an aspiration and the project value perspective, the number that we quoted earlier holds good. It is just that considering the ramp-up year and from an experience, we have a conservative approach.
Okay. Secondly, on order pipeline. This is only the last tender we have to implement and also some Maharashtra radiology pending centers are yet to implement it. As of now, there is no progress on the radiology because the centers remain similar. When do you think that we can complete the radiology centers, and what could be the other chances of getting some new orders in the current financials? As of now, I think there is no pipeline also.
Sure. Krishna , there are two parts of the question. The first part is regarding the MRI, the radiology project. I'm pleased to inform you that the MRI centers have already been started launching in the last couple of months. We have about 10 MRIs that are going live. Some of them already live, some of them will be in the coming weeks or months. We have MRI base getting activated. As regards to the other PPP projects, there were PPP opportunities, but as we mentioned in the past, Krishna is conscious about which PPP project to participate and eventually add into our kitty. There are a couple of PPP opportunities which are in the works, and hopefully in the coming quarters, we should be able to update you all with the outcome of the same.
We continue to pursue opportunities, but also conscious of the fact that we have a large Rajasthan project under implementation. The MRI is now getting live and pursuing selective opportunities which create long-term value for all of us.
Okay, got it. On the retail part, this time we have seen a flatter Q- over- Q. Being a scale-up business, I think it is a little bit slowdown in revenue front. How do you think this will shape up in the current year? Also on the margins front, this quarter we had good margins even excluding that valuation gain. In this current year, can we maintain that 29%-30% margins or is this a one-off?
Sure. Mr. Bala, on the retail side, I'll ask Mitesh to answer the query. With regards to the margins profile, we are working towards maintaining the current level of EBITDA margins. There might be some impact in the Q1 where there is upfront deployment of manpower. For example, in Rajasthan almost we're adding up 5,000 people. To that effect, there will be some impact.
On an annualized basis, we are trying to maintain the same level of EBITDA margins that we achieved during the year. Mitesh, on the retail side, you might like to.
Yeah. Hi, good afternoon, Mr. Bala. Well, this is nothing but some basic part and parcel of the annual business. A quarter up or a quarter little bit muted. It has nothing to do with the, or nothing to impact on any long-term planning or long-term vision that we carry. Quarter one and further upcoming quarters, you're going to see even very large extent of growth and numbers coming through from the retail part.
Okay, that's helpful. Last question with my case on the bookkeeping question. What is the amount of the receivables which are delayed by more than six months or the long-term pending receivables are there, like Karnataka and Himachal Pradesh.
What is the status of that and how much is pending as on date from that whole pending receivables, sir?
For both the projects, for HP and Karnataka, collections have happened. HP almost significant collections have happened. Karnataka also we've received a sizable chunk. There are certain key people who were there, for example some of the officials have been transferred, so there are delays, but I think it's in track and hopefully in the coming quarters we'll be collecting those as well. The individual state-wise amounts we'll ask Sujoy to share separately with you.
Okay. That's all from my side. Thanks a lot and all the best, Yash, and happy good day.
Sure. Thank you so much, Mr. Bala.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to two per participant. The next question comes from the line of Hitaindra Pradhan with Maximal Capital. Please go ahead.
Hi, sir. I hope I'm audible. Sir, my first question is adjusting for the non-renewal this year, what was your like-to-like revenue growth on the PPP side?
So-
The revenue growth was little muted.
Yes.
See adjusting for the non-renewal, what was our organic growth this quarter and the first quarter growth?
Our organic growth for like-to-like projects which are continuing is almost in the range of around 30% that was offset to an extent by some of our projects that got closed because the tenure got completed.
30 odd % for full year, sir, and for the quarter?
Yes. For the quarter, I think we'll share the details offline with you.
Okay, sir. The second related question, sir, what are the quantum of projects that are up for renewal and we can expect any kind of non-renewal this year, if you can give some color on that?
Sir, I think except for Tamil Nadu, there are no major contracts which are up for renewal during the year. Typically in this journey also many times the authorities also give us to extend this is happening if a tender is published or not. Not in the immediate. If anything comes up, we'll update in the coming quarter as well.
Okay, sir. The second question, sir, is just wanted to understand on the PPP side again. We provide a completely free of cost kind of treatment through government schemes, but are there any price escalation clauses there? What is the pricing looks like? If you can give some context and color to that.
Sure. For the PPP tenders, we have rate escalations which are factored into the agreements. They are contractually embedded. These rate escalations vary for each tender, ranging anywhere from 2%-5%. Some of them are annually, some of them every alternate year. There are these pricing arrangements that are there in each of these contracts.
Okay, sir. Thank you, sir, and all the best.
Thank you.
The next question comes from the line of Surya Patra with PhillipCapital. Please go ahead.
Yeah, thanks for this opportunity, sir. First of all, if you can give what is the revenue breakup between the pathology and the radiology for the year, sir?
I mean, the split between radiology and pathology is in the range of 50/50%.
50/50. Okay. My first question about radiology projects, sir. Whether we have downsized couple of pipeline project because earlier the Maharashtra was something like 56 odd MRI center, MRI CT center were supposed to be created and now in this presentation we are mentioning after the pipeline project the number will increase by just 10. If you can give some clarity about that and what is the update about implementation of the other pipeline radiology centers in the Maharashtra?
Yes. I think from the headline number, there's no downsizing of any of our projects. As I said, if some of the projects would have completed their tenure, some of those centers would have gotten. On the radiology front, we are adding MRI centers. Like I mentioned, we have almost 10 MRIs that will be added in the coming quarter as well, out of I think a total 17 odd MRIs that we are under implementation. Those are the new centers over and above the existing numbers that we have shown.
Okay. That means the pipeline is just 10 more centers in the Maharashtra, that is how much will be there.
Ten, and total is around 17. Ten are already at the installation stage, where they are under commissioning.
Okay, sir. Now regarding the pathology and related to Rajasthan also. See, you have guided for about INR 150 crore kind of annualized revenue. Since we are likely to set up something like 157 odd centers in Rajasthan, we are talking about INR 1 crore revenue per center kind of equation. Which looks very conservative considering the INR 3 crore kind of run rate what we are having. Any headwind that you do see for that PPP contracts?
I think that's a very valid question and like we've been also maintaining in the past. From an aspiration perspective and the numbers that we've quoted, of course, the headline run rate for growth is significant. We're just being calibrated in our guidance or the communication that we do, wherein this is something we know which is realistic. Of course, there's an upside as more and more collection centers get activated, more labs get activated. There's certainly an upside. From a guidance perspective, we like to be maintaining a conservative stance.
Okay. In that case, may I know, sir, what is the kind of upfront cost that we would have already seen in FY 2027, 2026, which would have to some extent pressurized our margin so far as Rajasthan is concerned?
Surya, we've been trying to see that the cost and the revenue go hand in hand. In FY 2026, there was no significant cost impact that came through, except for few of let's say, traveling or some of the logic costs. Hopefully, Q1, as I said, Q1, there will be some pressure because we have, as I said, almost 5,000 people onboarded at these different collection centers or the stuff. But again, the revenues are also flowing through. We are trying to see how the cost impact on the EBITDA is not very high and it's probably a few basis points here and there, and should be able to allow us to continue maintaining the EBITDA margins.
Okay. Just the last question from my side.
Surya, I would request you to please come back in the queue for further questions. Thank you. The next question comes from the line of Manoj Dua with Geometric. Please go ahead.
Good afternoon. My first question is, in Rajasthan next year, we can expect sale of more than INR 200 crore plus. As you know, this territory also are ramping up will be over till then.
Yes. As I said, from a headline, we expect around INR 200 crore plus. Since it's also PPP is under the implementation, there could be certain operational issues. We are just being careful in terms of the guidance and restricting about INR 150 crore.
Okay. On retail project, what is your aspiration from longer one around three, four, five years, whatever you can think of? Can you just again elaborate on that?
Well, good afternoon, Mr. Manoj. Over the longer horizon, around three to four years or five years kind of a period that we are looking for, having contribution of retail alone within the entire group revenue close to 25%-30% should be there in the line with.
Okay. Last question, how much sale we are expecting from the MRI from the Maharashtra?
Could you just repeat the question?
Addition. How much sales we can expect addition of adding more ten MRI in the Maharashtra?
Manoj, we'll share this number to you offline.
Okay. Thank you. Thank you. Best of luck.
Thank you.
The next question comes from the line of Mayur with Wealth Managers India Private Limited. Please go ahead.
Good afternoon, and thank you for taking my questions. This is not a question first, a comment. I'll go to the two questions which I have, but just opening, just a comment. When we look at the narrative around Krsnaa and the qualitative aspects, I think you tick mark all boxes with respect to the healthcare opportunity and the way it has done, and the scale at which we are operating, and even the business model at which we have been able to crack compared to the challenges which are there in the PPP. A great narrative on that and great team execution there. In the same breath, I'll also say that the execution, and you will also appreciate that execution has lagged given the opportunity size which we had. Sir, I just had one longish
Observation, one from the year's perspective. From listing perspective, FY 2021, we were looking at 20%-25% as the minimum CAGR, given the penetration, low healthcare opportunity size, the states at which we are present, and it's been there. It's what we have been looking at over the long term. After four years, the CAGR is more in the region of 10%-12%. Out of that, two years have been flattish. It's just that there has been lumpiness in two years. When we look at FY 2027, while Rajasthan will scale up, but the pipeline of new projects, as you said, because of pricing and it's not there. Does it structurally mean that we are looking at a more calibrated growth as we go ahead, given the CapEx requirements or given the challenges in there, firstly?
Secondly, FY 2025, I remember we were looking at 25% growth, we ended with 16% growth. FY 2026, we were looking at 15%-16% growth, we ended up with 1% growth. Even in the near term, the challenges of guidance versus what has been the delivery has been slightly subpar given the narrative. Sorry, your comments on that.
Sure. I think you kind of touched upon two aspects of the model. The first aspect regarding the PPP as a business model, as an opportunity. That opportunity still exists. It still is there. The only difference in our approach, as post-listing, like you mentioned, of course, given the scale at which we were operating then, considering the various states that were supposed to deploy PPP, we were also bullish and looked at those opportunities to convert, to mature, and to deliver. Having said that, over the period also, if you can see there are various PPP projects that Krsnaa undertook, and which are under implementation. Some of the PPP projects, considering the scale at which they came in or the price point at which they came in, we decided not to participate. The simple reason being, we don't recklessly pursue PPPs, and that has not been just post-listing.
It has been since the historical trend and the reason why Krsnaa is able to be a successful company in the PPP space, whereas there are other players who've not been successful enough. This is which is at core at Krsnaa. We look at PPP projects which are in a sense able to create long-term value. With regards to the growth, when you mention about while, yes, we had aspirations to go at a higher, there were also certain reasons. Some of the reasons could be attributed to, as I said, delays. Just to give you a reference of Maharashtra, the Maharashtra project itself had certain delays getting government sites on time. When we project, we expect certain things to happen in a certain amount of time. There are these operational delays. Some of them were setbacks which we didn't experience beforehand.
These are there. Fundamentally, the model remains intact. The strength in the model is there. We continue to look at PPP projects. As I said, there are a couple of PPP projects in pipeline, which we are working towards, and hopefully, we should be able to announce it in the coming quarters. I don't see a change. Yes, we have been calibrated in our approach in terms of the guidance considering these backgrounds, and which I believe is a more mature way of looking at the business since the last couple of years.
Right. Okay. The second element is slightly more on the financial side. I'll just club two, three in order to combine them and request you to answer each of them on just one by one. I'll club it so that it's the part of the two questions. One is the Rajasthan total CapEx was expected to be INR 200-INR 250. The CWIP shows more than INR 200 crore. Largely, what it shows is a large part of it has already gone inside. With respect to that, yet we are saying FY 2027 to be INR 500 crore. Where is that balance, such a large CapEx expected to come from? Given the fact that the project's pipeline at least has not been yet announced, so it will take some time. The schedule of-
Yeah. The INR 500 crore CapEx is a combination of Rajasthan, the MRI projects put together. Rajasthan, about INR 300 odd crores, and if you take MRI, which is about INR 150 odd crores, and the balance are for certain small projects like we've done in Jharkhand and Ranchi. That combination put together is a INR 500 crore CapEx that is outlined.
Is that a cash flow CapEx? When we say CapEx, we understand it's cash flow. Are you taking up capitalization?
This is capital investment. When I say capital investment, it's a combination of the debt, the combination of our internal accruals.
We will be spending INR 500 crores in this year, is what you are saying? Because you must have spent for Rajasthan already, right?
let me just clarify. The INR 500 crores CapEx is the capitalization that we expect to happen in this financial year out of some of which is time period, right? The balance like even the Maharashtra MRI projects will, the capitalization will happen in this year. The amounts were paid at different points in time either to vendors or to capital advances. The capitalization and therefore the capital investment happens in this financial year. I hope that clarifies.
Clear. Yes. Now it clarifies. Yes. On the numbers side, as I was trying to ask, we also had expectation to bring the receivables down to 100 days at the start of the year, subject to the expectation. We are at 135 days. On the receivable side also, if you can mention what has gone. There has been regularly some or the other developments, whether it was the systems upgrade at NHM, whether it was people up-shifting, as you mentioned, or some of the other things. We are still guiding for 120 days. The understanding was it should be more in the region of 100 days. Why are we?
Coming back to 120 and not able to achieve 100 days. How long do you see that the Rajasthan and, sorry, the HP and Karnataka things will continue to be there in the numbers? Sir, please let me just complete one more small question so that my turn is over, and I'll come back in the question in the queue. Just one small thing. Rajasthan FY 2027, once it comes in the P&L, do you believe that FY 2027 PAT will be higher than FY 2026 because of the cost and other things? That's it. Yes, sir, two questions. Thank you.
Okay. Again, I'll try to answer the two questions. The first one was regarding receivable delays. The receivable delays are something which if you see again historically, we have not seen these kind of delays, and we appreciate that, and we've taken significant efforts to bring it down.
The challenges are something which are, some of them are beyond our control. For example, when a MD, NHM officer or a government official gets transferred or moves out, the new officer takes his own time to look into the records. There were also some challenges from the funds that were coming from the central and the new system, the [SHH purse] that is being deployed, where there are operational challenges at the respective governments. There are multiple reasons why the receivables, and therefore, whilst if you see internally, we would love to bring it down to 100 days, which has been a historical trend. Considering the realistic position on the ground, we have now looked at bringing it down to 120 days. We've already come to almost 139 days, and I think the teams are geared up to bring it down with a stronger documentation.
Also, if you see a reflection from a past track record of 14 years, which is almost a virtual zero debt, we try to maintain that and that is how, Krsnaa, whether it is through our documentation or through the process or the sanction balances, we try to achieve that. Now, coming to your second question about the profits once Rajasthan gets fully implemented, whether they'll be higher. Directly, yes, we would love to have profits which are higher, but we are also cognizant that there's an impact of ramp-up that happens and the revenues, which I said from a conservative basis. We would love to achieve that, but I think then as maybe in the coming quarters, we'll be able to have a much better clarity once the full labs get deployed, the full staff gets deployed.
Yes, especially we are trying to achieve at least the same level of PAT margins in the coming year as well.
Thank you, sir. Mr. Mayur, I would request you to please come back in the queue for further questions. The next question comes from the line of Lokesh Manik with Vallum Capital. Please go ahead.
Yes. Hi, good afternoon. Yash, Mitesh and team. Yash, my question was on radiology. 2024- 2025, we expanded from 148 centers- 180 centers. We were expecting some revenue flow-through, at least in 2026. By when do you expect this expansion that we took from 148- 180 for the revenue to come in?
Yeah. The revenues are expected to come in this year. As I said, there were certain delayed installations of various centers. The revenues will start coming for the radiology business this year as well.
Okay. My second question, just a clarification, Yash, that is it correct to understand that by Q2 we will have all the infrastructure up and running for Rajasthan, which would take our pathology lab network to about 297, including satellite and mother labs and reference labs. That is one. Second, do we see FY 2027 where radiology goes, like you mentioned, 190 we are already, 10 we are adding, and 60 are in pipeline, so that 60 also gets completed by FY 2027 exit?
Could you just repeat the question? I think you spoke only pathology front.
Yeah. Pathology going to 297, which is existing plus Rajasthan coming in. Is that the correct understanding by Q2? Would that happen?
Yes.
Second is radiology. We are at 190. We are adding 10 centers in this quarter, Q1. You mentioned there are 60 or 70 in pipeline. Will that also get added by this year, or that will get added by the next year?
Total are 70, out of which 10 will be added in this quarter. The balance six or seven in the coming quarters.
By FY 2027 exit, we will be at about 260 radiology centers as well. Is that understanding correct?
No, 190+ 17.
17. Okay. Got it. That's it from my side. Thank you so much.
Sure. Thank you.
Thank you. The next question comes from the line of Vinod Krishna with Avendus Wealth. Please go ahead.
Sir, am I audible?
Yes.
Am I audible? Sir, thank you for the opportunity. Sir, it's great to see such a healthcare platform build, my question is coming from the long term to understand the inherent risk in the business. We are dealing with governments, how should we think because receivables, it's last two years, you have this Himachal and Karnataka. Tomorrow, governments can change in other states. If it happens in another one, two states, suddenly our balance sheet and our business model will look very risky. Now we have started taking debt, we are going in a huge expansion phase. How do you think that you said you never had debt, maybe that may not repeat because we have already seen two states giving us a lot of trouble. Tomorrow, governments can change in the center and in many states, right?
How should we look at business model can within two, three quarters can completely be off the tracks. How should we think how you guys are taking care of the receivables risk, or why should we think that receivables is not a big risk for this business model?
Sure. I'll answer that. If you look at your Krsnaa historically as well, we've seen various governments come and go. It is not that this is the first time we have seen. Governments will come and go. These tenders typically are with central and the state combination. Per se, as I said, as a business model, the risk does not change significantly. There have been procedural delays. There were elections post that, the new system came in, and of course, some of the budget approvals from the centers will change. If you see, apart from these two states, we are doing business across 18 states, and the problem doesn't exist in the other so many states.
Other states are BJP, these two states are Congress. Tomorrow Congress can come in other states, right?
Even we have seen governments change where Rajasthan it was earlier in the Congress, then it came to BJP. Likewise, we've seen other states where governments have changed. Whether it is Congress or BJP, it really doesn't matter because, as I said, these funds are from the NHM, which are central-driven funds, and they're following through a budgetary process. The delays, as I said, mostly are operational in nature, nothing to do from a structural or a strategic perspective.
In the contract, do we have any liabilities if we stop doing services, like you have stopped one service in Karnataka. Is that clarity for you because this.
I'll answer that. In some of these contracts, there are arrangements where we can suspend the operations if payments are not done. Again, as I said, Krsnaa has been what we call it a temporary suspension of these operations, wherein we inform the authorities in advance that the payments are getting stuck, kindly release the payments or we'll be forced to suspend. When we do this, and this has actually borne fruit, where we are now receiving confirmations from the government that the payments will be made. In some instances, the payments have also come through. As I said, this is a partnership between the government and this is why there are other sectors where payments are getting better. Considering healthcare and the NHM-driven model, we do get our funds on time.
Delays have happened, which, as I said, it's an aberration, but we are continuously monitoring this and taking steps to again strengthen this going forward.
Thank you, sir. Mr. Vinod, I would request you to please come back in the queue for further questions. The next question comes from the line of Nikhil Gupta with Kadens Capital. Please go ahead.
Thank you for the opportunity. I believe I'm loud and clear. We are basically new to the business, trying to understand few aspects, and most of my questions have been answered. One question on the leadership team. Can you talk about the few high-level resignations people have attained? I can see so many resignations in the past few months. CSO, CBO, CEO have left. In the last conference call, I think Pallavi Jain was there. She was the executive director. Can you talk about her profile, what she was handling, and what she's doing right now? Basically a high-level question on the leadership team because it's a very operational-heavy business.
Yeah. I think from an operations perspective, the leadership team remains intact. It's strong to continue to deliver. People will come and go. It happens in any company as it move along. Just to give you a reference, our earlier CFO spent five years, and after five years, he wanted to pursue his own personal growth plan. That is how. Five years itself demonstrated that there was stability, and likewise for the other players. Including Pallavi, her role was handling the installation of our centers, looking out at government. Again, after having spent so many years and as discussed with the board. Fundamentally, from a leadership team perspective, the team is stable. We have Mitesh, our group CEO, along with me, Chairman as well, and now the interim CFO and the rest of the team.
I think the team is intact and strong to deliver growth and value in the coming years and coming quarter the same. Any specific details, you can reach out to Sujoy, and we'll share more of these details offline.
Last follow-up question on the same thing. I think Pallavi was the co-founder at the start, right? Why was she not given equity at that particular stage?
I think Pallavi was not a co-founder. She was a part of the founding team member. Regarding the equity or not, I think those are personal questions which we'll probably take it offline.
Okay.
Thank you. The next question comes from the line of Surya Patra with PhillipCapital. Please go ahead.
Hello. Yeah. Just a follow-up, sir. Just on the Apulki. Now, we have mentioned that Apulki is no longer an associate company. Does that mean we have monetized our investment there? That is one. The related question is that Apulki, in the chain of Apulki Hospitals, was considered to be one of the key growth drivers for us also. What happens to that opportunity if Apulki is not a partner for the business going ahead?
No. Surya, Apulki's investment from an accounting, it's not an associate, but our partnership is intact. We have exclusive rights for all the diagnostics, both in the cardiology and oncology space for the next 30+ years across all the hospitals that Apulki will be coming in. The first one was recently launched by the hands of Honorable Chief Minister of Maharashtra. Therefore now it's entering into the business where the business will start ramping up, the other hospitals are under different stages of construction. We do have the growth strategy that we had envisaged that is bearing fruit. As the hospitals ramp up, we have the exclusive tie for the revenues on the diagnostic side. Again, as you are aware, oncology and cardiology both have significant diagnostic requirements, and therefore we see a strong upside in the years to come from Apulki as a strategic partnership.
Okay. Second point was that, sir, in the opening remark, you have mentioned that expanding business geographically beyond India. It sounded that way. Any thought process on that front or any initiative that you have taken, or how is it?
Yes. We have conversations going in some of the states where we are not present in the PPP. These are some of strategic alliances across these states. I think probably by end of Q1, we should be announcing some of these alliances as well.
That is domestic geographic expansion like that?
Yes.
Okay. There is last one point about RPL, sir. Can you share what would be the EBITDA that we would have generated out of RPL in the first year of enrollment, I mean, sir, implementation and all that?
You mean the first year of RPL?
I mean, FY 2026 could be a kind of practical first year for RPL. From that angle, I was saying that, okay, to what level of EBITDA that we will be operating in and what scope of expansion in the margin front in the following year with the further ramp-up?
Yeah. In the first year, the EBITDA was negative, I think marginal, largely because of we had to deploy the manpower for scaling up in these geographies, some of the logistic costs. In this FY 2026, 2027 is where we are looking at positive EBITDA, and trying to get it to the same levels of the consolidated EBITDA levels by the end of financial year FY 2026, 2027.
Is it fair to believe, sir, say margin scenario trajectory for FY 2027, considering the kind of hit we would have seen from RPL in FY 2026 and some marginal hit from Rajasthan and incremental revenue led expansion or contribution coming from the radiology new centers in Rajasthan also? On the margin front, we should see a kind of a decent scale improvement on a YOY basis for FY 2027.
Yes. I think directly we are also aspiration towards having an improvement. As I said earlier, a combination of our existing business, the retail also, as well as the Rajasthan picking up. Quarter wise, there might be some aberration because of revenue not being commensurate, especially on the Rajasthan front. I think if you look at it from a year-end perspective, we believe that the EBITDA margins at least should be same and not have a dent, and of course, looking forward for an upside to these various levers that we are working on.
Thank you, sir. The next question comes from the line of Deepak Ajmera with IGE India. Please go ahead.
Hello, good afternoon. My question is on the retail side. If I look at the touchpoint.
I'm sorry to interrupt, Mr. Deepak, could you please use your handset? Your voice is not clear.
Yeah. Now it is audible?
Yes, sir. Thank you.
Okay. On the retail side, if we look at the touchpoint, it is coming down consistently for last two quarters, the revenue is also lower compared to last two quarters. Whereas we have a huge aspiration on that segment. What's your take there?
Sorry, could you repeat the question?
On the retail side, the touchpoint is coming down consistently for last two quarters, and revenue is also almost flat or down compared to last quarter.
I guess you need to check around the data and because the touchpoints and the expansion is pretty much progressive quarter-on-quarter from quarter one to quarter four, and in quarter three versus quarter four, absolute addition has gone for 703 rather as in touchpoints. In quarter four, revenue is little muted versus quarter three, and that's a basic part of any business. It is nothing too much look around because as it has revived back and it is on a very strong growth trajectory as well.
Hello. Deepak, sir, could you please repeat your question?
We answered the question. Were we audible?
Yes, sir. Mr. Deepak, does that answer your question? As there's no response, we'll move on to the next question. It's from the line of Pooja Sareen with Inc42. Please go ahead.
Thank you for the opportunity, sir. I just wanted to ask whether the Rajasthan capital expenditure will be capitalized from Q1, and also what will be the impact on depreciation and interest costs for FY 2027? If you can quantify the depreciation and interest cost numbers outlook. Thank you.
Sure. Pooja , the capitalization will happen from Q1 onwards, around almost INR 200 crores. On the specifics with regards to the depreciation interest, I'll ask Sujoy Bose to come back to you separately on this.
Okay, sir. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Yash for closing remarks.
Sure. Thank you. Thank you everyone for joining our Q4 FY 2026 earnings call. Hopefully, we were able to address all the queries. If any questions remain unanswered, please feel free to connect with Mr. Sujoy Bose, our company secretary, and looking forward to interact with you in the coming quarters. Thank you, and have a good day ahead.
Thank you. On behalf of Equirus Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.