Chandan Healthcare FY26 review: growth, expansion and the working-capital trade-off

Chandan Healthcare Limited closed FY26 with a clear message to investors: the company is shifting from a North India diagnostics player to a broader, multi-state platform built on centre expansion, partnerships, and long-duration government PPP projects. The reported numbers were solid. FY26 total income came in at INR 280.67 crore, EBITDA at INR 56.84 crore, and reported net profit at INR 27.06 crore. That translated into 20.43% year-on-year growth in total income and 31.02% growth in EBITDA, with EBITDA margin improving to 20.25%.

Q4 FY26 continued the upward trend on the top line. Total income was INR 77.41 crore versus INR 65.07 crore in Q4 FY25. EBITDA was INR 14.25 crore and reported net profit was INR 6.92 crore. Margins were slightly lower year on year in the quarter, but management framed this as a function of expansion and ramp-up.

FY26 in numbers: growth with improving full-year margins

Chandan’s three-vertical structure is explicit in the investor presentation. FY26 revenue split by business vertical showed pathology and pharmacy as near-equal pillars, with radiology as a smaller but strategically important component.

Management also highlighted operating scale metrics for FY26, including 20 lakh patients and 88 lakh plus tests conducted.

Revenue mix and what it implies

The company positions itself as a diversified diagnostics and pharmacy platform, operating across B2C, B2B, and B2G channels. For FY26, the investor presentation disclosed an even split between institutional and government on one side and retail diagnostics on the other.

B2C retail diagnostics was shown at INR 111 crore, or 40% of FY26 revenue. B2B institutional clients were shown at INR 83 crore, or 30%, supported by 230 plus private hospitals and clinics as partners. B2G government PPP projects contributed INR 83 crore, or 30%, anchored in long-term contracts.

This mix matters because it changes the operating rhythm of the business. Retail diagnostics tends to be cash-heavy with steady repeat volumes, while institutional and government contracts can offer visibility but also bring receivable cycles and ramp-up timelines.

The vertical revenue split in the investor deck was as follows: pathology INR 119.48 crore (43.23%), radiology INR 36.70 crore (13.28%), and pharmacy INR 120.22 crore (43.50%).

Expansion strategy: partnerships, PPPs and metro entry

The Q4 operational highlights were built around three levers.

First, the Jeena Sikho partnership. Chandan described an exclusive diagnostics partner arrangement for Jeena Sikho’s pan-India network. The presentation stated that more than 50% of facilities were already operationalized across 13 states, with 100% targeted in FY27. In the earnings call, management provided a real-time indicator of traction, saying daily revenue from this relationship had crossed INR 4.5 lakhs.

Second, government PPP projects. The presentation laid out multiple 10-year projects in Punjab, Haryana and Assam, including installation of MRI and CT systems. Punjab projects were described with an estimated project value of INR 25 to 26 crore in the presentation. In the concall, management said these PPP projects were expected to be commissioned in phases starting June 2026, with revenue contribution expected from Q2.

Third, entry into new cities and metros. The company highlighted centre launches in Mumbai, Kolkata and Raipur, positioning these as steps toward a wider network across high-density and emerging urban markets.

Margins and the pharmacy effect

A recurring question on the concall was why management spoke about higher EBITDA levels while the reported consolidated EBITDA margin in FY26 was 20.25%. Management’s explanation was that diagnostics, on a standalone basis, earns materially higher margins, while the pharmacy business runs at lower EBITDA.

In the Q&A, management stated pharmacy EBITDA is around 5% and that this pulls down consolidated margins. They also said some pharmacy retail units were closed to improve segment profitability. The investor presentation echoed the positioning, stating pharmacy remains complementary while strategic focus stays on scaling diagnostics.

This split is important because it clarifies what investors are actually underwriting. If diagnostics scale faster than pharmacy, consolidated margins can expand even without major improvement in pharmacy profitability. If pharmacy continues to grow at a similar pace but stays low-margin, it can keep reported margins capped.

Balance sheet, cash flow and receivables

FY26 balance sheet data showed fixed assets at INR 113.23 crore, up from INR 80.45 crore in FY25, reflecting capex and network growth. Debt metrics remained moderate in the deck, with FY26 debt-to-equity at 0.31 times and interest coverage at 8.00 times.

The bigger discussion point was working capital. Trade receivables rose to INR 86.40 crore in FY26 from INR 47.26 crore in FY25. Management attributed this largely to government receivables, noting that payments can come as lumpsum for multiple months based on budget cycles.

Cash flow reflected this tension. Operating cash flow improved to INR 16.17 crore in FY26 versus negative INR 2.75 crore in FY25, but investing outflows remained large due to expansion.

What to track in FY27

Management provided several operational markers that investors can track through FY27 disclosures.

One is the commissioning timeline of PPP projects. Management said projects in Punjab, Haryana and Assam would start coming online from June 2026 and roll out over about eight months, with contribution expected from Q2.

Second is the pace of network build-out. In the concall, management stated a FY27 target of five comprehensive centres and 20 labs. They also described the capex range, stating a comprehensive centre can cost about INR 6 to 7 crore, while a standalone lab costs about INR 1 crore.

Third is franchise scaling. Management stated a target to reach 1,000 operational franchises in 24 months, and indicated adding 25 to 35 franchises per month.

Finally, advanced diagnostics projects like PET-CT centres at Gorakhpur and Kanpur and a genome lab in Lucknow were discussed as planned additions in FY27, with management stating PET-CT could start in the first quarter and the genome lab could take five to six months.

Closing view

Chandan Healthcare’s FY26 performance shows a company in active build mode, delivering 20% plus income growth while expanding margins at the full-year level. The strategic direction is clear: scale diagnostics through a company-owned network, supplement volumes through institutional partnerships like Jeena Sikho, and lock in long-duration opportunities through government PPP projects.

The trade-off is also clear. Faster expansion and higher government exposure can stretch receivables and keep investors focused on cash conversion. FY27 will likely be defined by how efficiently the new centres and PPP projects ramp, and whether working capital stays under control as the footprint expands.