Krsnaa Diagnostics Shines in Q2 FY26: Record Profits and Strategic Expansion Drive Future Growth

Krsnaa Diagnostics Ltd., a prominent integrated diagnostic service provider in India, has delivered an exceptional performance in the second quarter of Fiscal Year 2026. The company announced its highest-ever quarterly profit, reinforcing the strength and resilience of its business model. For Q2 FY26, Krsnaa Diagnostics reported a robust revenue from operations of INR 206 crore, marking an 11% year-on-year growth. This was complemented by an impressive 18% year-on-year increase in EBITDA, reaching INR 60.2 crore, with a healthy margin of 29%. The Profit After Tax (PAT) soared to INR 23.9 crore, a significant 22% rise year-on-year, translating into a 23% growth in Earnings Per Share (EPS) to INR 7.25. This strong financial showing underscores the company's disciplined execution and effective operating leverage.

The growth in Q2 FY26 was primarily driven by sustained momentum across both the radiology and pathology segments. The company's focus on cost leadership and operational excellence has directly translated into enhanced profitability. This consistent performance reflects the maturity and consistency of Krsnaa's model, with a clear aim to deliver sustainable improvements in EBITDA margins, profit margins, and Return on Capital Employed (ROCE), which is now trending towards 15% and is expected to strengthen further in the coming quarters.

Below is a financial summary table illustrating the core data:

Strategic Growth Pillars and Market Expansion

Krsnaa Diagnostics is actively pursuing several strategic initiatives that are set to unlock future upside. The Rajasthan PPP project, touted as India's largest diagnostic PPP, is progressing well and on schedule. This ambitious project is expected to bring meaningful revenue accretion from Q4 FY25 onwards, with a full-year contribution anticipated in FY27, which will significantly strengthen the company's growth momentum. The rollout involves operationalizing 10 labs in November, 25 labs and over 500 collection centers by December, and the remaining 152 labs and 1,100 collection centers by the end of Q4. This expansion will solidify Krsnaa's position as a deeply rooted and widely accessible pathology service provider in India.

Another key growth driver is the accelerated expansion of the company's retail business. The direct-to-consumer segment witnessed an impressive 60% quarter-on-quarter growth in Q2 FY26. Retail has contributed approximately 8% of the company's revenues in the first half of the year, and management expects this contribution to accelerate to 8% to 10% in FY26, and further to 15% to 20% in the coming financial year. This strategic shift is aimed at enhancing market positioning, delivering strong margin accelerations, and improving overall profitability. The company is targeting a Rs. 100 crore run rate for its retail business by Q4, indicating significant market penetration and expansion.

Operational Excellence and Competitive Edge

Krsnaa Diagnostics distinguishes itself through a relentless focus on quality, accessibility, and affordability. The company recently achieved accreditation from the American College of Radiology (ACR), a prestigious milestone marking the first-ever ACR recognition outside the United States. This global distinction, along with existing CAP (College of American Pathologists) and NABH accreditations, firmly establishes Krsnaa's position as a benchmark for globally recognized diagnostic standards. These accreditations not only bolster patient trust and volumes but also strengthen institutional credibility.

The company's Public-Private Partnership (PPP) model, combined with its pan-India network across 18 states and union territories, enables it to provide high-quality diagnostic services at prices up to 70% lower than market rates. This commitment to affordable healthcare ensures access for millions, particularly in Tier-II and Tier-III towns. Krsnaa is also investing in state-of-the-art infrastructure, including soon-to-be-operationalized AI-enabled MRI centers and low-radiation CT scan centers, demonstrating its commitment to technological advancement and patient safety.

Navigating Challenges and Future Outlook

While Krsnaa Diagnostics celebrates its achievements, it remains transparent about challenges. The company's receivable cycle currently stands at around 150 days, a temporary situation attributed to new central government payment norms and system transitions. Management is actively working to reduce this to approximately 100 days by year-end, emphasizing that no bad debts have been recorded since inception. The retail business, though growing rapidly, is yet to reach breakeven, a milestone anticipated with a Rs. 100 crore run rate. The planned CAPEX for the current year, excluding Rajasthan, is between Rs. 150 crore and Rs. 170 crore, with Rs. 80 crore already incurred.

Krsnaa Diagnostics' Q2 FY26 performance reflects a company that is not only achieving record profits but also strategically investing for sustainable long-term growth. With a clear roadmap for expansion, a strong commitment to quality, and a focus on operational efficiency, Krsnaa Diagnostics is well-positioned to capitalize on India's expanding healthcare landscape and reinforce its leadership in the diagnostic sector.