Krsnaa Diagnostics Q4 FY26: Margins Steady, PAT Boosted by Fair Value Gain, FY27 Hinges on Rajasthan and Retail

Krsnaa Diagnostics closed Q4 FY26 with revenue of INR 1,926 million, up 4 percent year-on-year, while maintaining EBITDA margin at 29 percent. For the full year FY26, revenue rose 8 percent to INR 7,728 million, and EBITDA increased 10 percent to INR 2,149 million, translating into a 28 percent EBITDA margin.

The quarter’s headline surprise was profitability. Reported PAT in Q4 FY26 jumped to INR 416 to 417 million, more than doubling year-on-year, and FY26 PAT crossed INR 1,000 million for the first time at INR 1,013 to 1,014 million. However, the company explicitly disclosed that Q4 PAT includes a fair valuation gain of INR 221.75 million on its investment in Apulki Healthcare, which lifts reported earnings beyond core operations.

What drove FY26: scale-led execution with tight cost structure

Operationally, management positioned Krsnaa as an integrated diagnostics platform spanning radiology, pathology, and tele-radiology, with a PPP-heavy footprint intended to serve underpenetrated geographies. The investor presentation highlighted 190 CT and MRI centres, over 4,700 patient collection centres, and 147 pathology labs, alongside presence across 18 states and union territories. In FY26, the company processed over 59 million tests and served approximately 19.8 million patients.

The consolidated financial statement in the presentation shows total expenses at 71 percent of revenue in Q4 FY26 and 72 percent in FY26, supporting steady EBITDA margins despite continued expansion. Cost of materials, employee cost, and other expenses remained broadly stable as a share of revenue. One visible pressure point was finance cost, which increased to INR 121 million in Q4 FY26 from INR 68 million in Q4 FY25, consistent with a balance sheet that shows materially higher borrowings as the company scales infrastructure.

Note: INR million converted to INR crore (1 crore = 10 million). Q4 FY26 PAT includes fair valuation gain of INR 22.175 crore.

Network build-out and the FY27 ramp: Rajasthan plus MRI commissioning

The company’s network expanded during FY26, with the presentation stating that 51 centres and 1,167 collection centres were operationalized in FY26. CT centres increased from 143 to 149 and MRI centres from 37 to 41 between Q4 FY25 and Q4 FY26. Reference labs rose sharply from 6 to 33, while collection centres increased from 3,595 to 4,762.

The key near-term driver, however, is Rajasthan pathology. In the earnings call, management stated that Rajasthan had no revenue contribution in Q4 FY26 because the company was establishing labs and collection centres. Contribution is expected from Q1 FY27, with major installations to be completed within Q1 and some portion extending into Q2. By Q2 FY27, management expects installations to be completed.

On revenue potential, management guided Rajasthan at INR 100 crore to INR 150 crore for a full-year basis, noting that earlier aspiration numbers reflected headroom but that the company prefers a conservative ramp-up assumption.

On radiology, management indicated MRI centres have started launching and that around 10 MRIs are going live, out of about 17 MRIs under implementation. Ten are expected to be added in the current quarter (Q1 FY27), with the remaining seven in subsequent quarters.

Retail (RPL): traction visible, profitability still a work in progress

Krsnaa’s retail strategy is built on leveraging PPP infrastructure as a cost base and expanding via franchises, collection networks, and home collection. In Q4 FY26, retail revenue rose to INR 158 million from INR 64 million in Q4 FY25, and retail contribution to group revenue increased to 8 percent (from 3 percent in Q4 FY25).

Management acknowledged that retail EBITDA in FY26 was marginally negative due to upfront manpower and logistics required for scaling. The stated objective is for retail to turn EBITDA positive in FY27 and to reach consolidated-level EBITDA margins by the end of FY27. Management also expressed an aspiration that retail could form 25 to 30 percent of group revenue over a 3 to 5 year horizon.

Cash flow focus: collections improved, DSO target remains sub-120 days

A recurring investor concern for PPP-led businesses is collections. Management highlighted a strong collections phase in the second half, with INR 2,910 million collected in H2, including INR 1,580 million in Q4, the highest quarterly collection in the company’s history. DSO improved from 155 days in Q3 FY26 to 139 days in Q4 FY26.

For FY27, management guided that its improvement journey to sub-120 days remains on track. It reiterated that delays are administrative rather than credit risk, and repeated its track record of virtually zero bad debt since inception.

Balance sheet and capital intensity: expansion funded with higher leverage

The FY26 balance sheet in the presentation shows total assets of INR 18,237.16 million, up from INR 12,815.95 million in FY25. The increase includes higher capital work-in-progress (INR 2,080.72 million vs INR 29.63 million) and larger bank balances other than cash and cash equivalents.

Borrowings increased materially, with non-current borrowings rising to INR 4,371.44 million as of March 31, 2026 from INR 185.04 million as of March 31, 2025. Management discussed funding growth through internal accruals, operational cash flows, and a vendor-financed capex model, alongside debt.

In the call, management discussed a planned capital investment of about INR 500 crore in FY27, clarifying that this represents capitalization expected in the financial year and includes Rajasthan (about INR 300 crore), MRI projects (about INR 150 crore) and smaller projects.

Takeaways

Krsnaa Diagnostics ended FY26 with stable margins and improving collections, while reported earnings benefited from a disclosed fair value gain. FY27 execution will be judged on three operational milestones the company itself laid out: Rajasthan pathology revenue contribution beginning Q1, installation completion by Q2, and retail moving into positive EBITDA with an ambition for a higher revenue share over time. The company also disclosed a dividend recommendation of INR 2 per share.