Target: ₹833
CMP: ₹539.20
Krsnaa Diagnostics Q4FY26 revenue at ₹192.60 crore(up 3.5/6.3 per cent y-o-y/q-o-q) was below our as well as consensus estimates (7 per cent lower). EBITDA at ₹54.90 crore (up 3.6/18 per cent y-o-y/q-o-q) materially beat estimates led by lower than expected operational costs.
We had expected an escalation in operational costs in Q4 owing to upfront costs related to implementation of Rajasthan project. PAT came at ₹41.70 crore (up 102 per cent y-o-y and 171 per cent q-o-q), aided by fair valuation gain of ₹22.20 crore related to Apulki Healthcare (part of other income) during the quarter. Excluding this one-off gain, adjusted PAT stood at ₹10.20 crore and declined y-o-y/q-o-q.
B2C (retail) revenue stood at ₹15.80 crore was flat q-o-q. The B2C business is now supported by 3,500+ touchpoints including 500+ franchisees and collection centres. Retail contribution reached around 8 per cent of revenue during FY26 and management expects the share to move into double digits going ahead.
Management lowered guidance on Rajasthan project in FY27 to ₹100-150 crore as a conservative approach considering the timing uncertainties in the ramp up phase. The company will capitalise ₹530 crore in FY27 in fixed assets (towards Rajasthan project and radiology expansion) while aiming to maintain EBITDA margins around current levels despite temporary Q1 pressure from Rajasthan manpower deployment.
Based on our revised estimates, we retain Buy with a PT of ₹833 (23x FY28E EPS). We estimate FY26-28E Revenue/EBITDA/PAT CAGR of 19.9/18/7.2 per cent.