Krsnaa Diagnostics Ltd (NSE: KRSNAA) Q1 2026 Earnings Call dated Aug. 12, 2025
Corporate Participants:
Unidentified Speaker
Yash Mutha — Executive Director
Mitesh Dave — Group Chief Executive Officer
Pawan Daga — Chief Financial Officer
Analysts:
Unidentified Participant
Amey Chalke — Analyst
Surya Narayan Patra — Analyst
Lokesh Manik — Analyst
Ayush Chaturvedi — Analyst
Rucheeta Kadge — Analyst
Avadhoot Joshi — Analyst
Rikesh Parikh — Analyst
Aditya Chheda — Analyst
Bharat Celly — Analyst
Saloni Bavishi — Analyst
Mayur Parkeria — Analyst
Shreyans Katani — Analyst
Sagar Sanghvi — Analyst
Manik Bansal — Analyst
Amruta Deherkar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Krishna Diagnostic Limited Q1FY26 earnings conference call hosted by JM Financial Institutional securities Limited. Before we begin, I would like to remind all participants that that today’s call may contain statements that are forward looking statements including but without limitation statements relating to the implementation of strategic initiatives and other statements relating to Krishna Diagnostics future business development and economic performance. While these forward looking statements indicate our assessments and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual development and result to differ materially from our expectations.
As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on a Touchstone phone. Please note that this call is being recorded with this.
I now hand the conference over to Mr. Amer Chalke from GM Financial. Thank you. And over to you sir.
Amey Chalke — Analyst
Thank you Sandhya. Good afternoon everyone and welcome to the Q1FY25 business conference call of Krishna Diagnostic Limited. Joining us today on the call are Mr. Rajendra Mukham, Chairman and Full Time Director, Mr. Yash Mutha, Managing Director, Ms. Pallavi Bhak, Executive Director, Mr. Ritesh D Group CEO, Mr. Pawan Daga, Chief Financial Officer, Mr. Vivek Jain, Head Investor Relations.
I would like to hand over now to Mr. Yash for his opening remarks. Thank you. And over to you sir.
Yash Mutha — Executive Director
Thank you Amay. Good afternoon everyone and thank you for joining Krishna Diagnostics Q1 FY26 earnings call. Diagnostics in India is in the midst of a multi year upcycle. Radiology is set to grow even faster as advanced modalities penetrate beyond Metros translating into rising volumes, greater formalization and a clear opening for a scaled tech enabled platforms to win share. Krishna is uniquely positioned to lead this growth. We operate across 18 states and Union territories delivering integrated radiology, pathology and teleradiology services. The only listed company of scale running a nationwide PPP engine. Our quality edge is unmatched with 54 NABL accredited labs, 31 NABH accredited radiology centers and India’s first CAP accredited pathology lab in the government facility.
And the country’s first NABH accredited teleradology hub. In terms of our quarter one FY26 performance which demonstrates scale with profitability, the revenue stood at 1930 million which is a 13% year on year growth with the EBITDA at 524 million at about 27% margin and the PAT stood at 205 million which is about 11% margin. We achieved this by serving 5 million patients and processing almost 16 million tests at our various facilities. On the retail side, our retail momentum is accelerating. Our touch points have surged from 362 to 2,414 on a year on year basis and the retail revenue has grew sharply.
Our B2C contribution has increased meaningfully. The retail now contributes 6% of our overall group revenues. Compounding quarter after quarter, our moat is clear. We offer high quality diagnostics at 70 to 90% below the prevailing market prices and still deliver margins which are comparable to the peers powered by a PPP and retail hybrid, shared infrastructure and disciplined execution. In terms of our strategic priorities, PPP as a compounding engine which continues. We are proud to announce the Rajasthan Award which is a transformative achievement with 42 mother labs, 135 satellite labs and 1,300 plus collection centers across all districts targeted for full operations by FY26 with material revenues starting from FY27 retail where we are strong we are scaling rapidly in Maharashtra, Punjab, Assam and Odisha leveraging the PPP hubs for logistics, QA and the Brand Trust Radiology scale and the teleradogy leverage.
On completion of our current order book we will be operating 200 plus CT scan MRI centers ranking among Asia’s largest. The NABH accredited Teledev hub enables rapid high quality reporting to the remotest sites. In terms of cost leadership, our cost leadership with quality is intact. Our pacs, LMI solutions, automations and the shared infrastructure across PPP and retail drive enduring cost advantages without compromising on accuracy or the turnaround times. In summary, we are structurally advanced. We are structurally advantaged platform with diversified revenue streams, contracted growth from long term PPPs and accelerating high margin retail. This is a business designed not just to grow with the market but to take share from it consistently and profitably.
With this I’ll now hand over to Mr. Mitesh Dawe, our Group CEO to take you through RPL’s momentum and the growth unfolding in our focus states.
Mitesh Dave — Group Chief Executive Officer
Thank you, thank you Mr. Yash and. A very good afternoon to everyone beside Mitesh Dawe. I’m absolutely delighted to share the encouraging progress we have made in our journey to build India’s most affordable, accessible and integrated diagnostic service platform spanning across radiology and pathology, both keeping quality at its core. Over the past year we have significantly strengthened our presence in retail diagnostic space. Our growth is backed by both value and volume driven by high patient satisfaction which is a true testament to our scalable model, sharp execution and vast untapped potential that lies ahead. At the heart of our successes are asset light capital efficient model enabling us to expand rapidly without compromising agility or service quality.
Today with 2,400 plus Krishna touch points clocks around 7x increase in just one year, we have created one of the most widely distributed diagnostic network in India. Our leadership in the public private partnership further strengthens our reach and gives us foundation to scale retail even more faster. We are on track to have retail contribution from close to 5 to 8% of total revenue by FY26 with clear levers in place to accelerate beyond that. Our growth strategy blends company owned centers, franchisee touch points, collection points, deep digital integrations ensuring affordable and accurate diagnostic wherever patients live, work or seek care.
Under our retail brand RPL, we are redefining what patient can expect from diagnostics. A 24×7 accessibility, industry leading turnaround times, transparent and affordable pricing. Our expansion in Maharashtra, Punjab, Assam and Odisha reflects a thoughtful approach leveraging our PPP backbone while addressing fast growing B2C demand in both urban and rural markets. Digital innovation is centered to this transformation from seamless test booking to rapid reliable result delivery. Our platform improved turnaround times, enhance clinical decision making and make diagnostics more patient centric. We are also building a strong B2B B2C ecosystem of partnering with corporates, insurance companies, hospitals and independent labs as well as offering home based diagnostics and preventive wellness services.
This Omni channel approach ensures we are present wherever healthcare needs is there. Across everything we do, trust remains our most valuable currency. The trust of millions of patients inspires us to push boundaries, grow responsibly and continuously improve the way we deliver care. The opportunity in front of us is enormous and we are ready to capture it. With our strong execution capability, deep diagnostic expertise and the growing credibility of rpl, we are poised to lead the next wave of retail diagnostic in India. Our mission is straightforward and ambitious to be the doctor’s most trusted partner and the patient’s first choice for affordable anytime, anywhere quality diagnostics.
With that, I’m signing off and handing over to the Mr. Pawan Chief Financial Officer to take us through the financial highlights. Thank you.
Pawan Daga — Chief Financial Officer
Thank you Mr. Mitesh. Good afternoon to everyone. Let me take a moment to briefly walk you through our financial performance for the quarter. Revenue for Q1FY26 stood at Rupees 1,913 Million, reflecting a robust year on year growth of 13% driven by sustained momentum in both radiology and pathology segments. Our focus on cost leadership and operational excellence has translated directly to our profitability. EBITDA grew by an impressive 19% year on year growth to 524 million. This performance resulting in a 120 basis point expansion in our EBITDA margin which now stand at 27% profit after tax increased by 15% year on year to rupees 205 million with a margin of 11%. This demonstrates our continuous ability to not only grow the top line but also deliver the bottom line. Earning per share of rupees 6.25 for. Q1FY26 up from 5.46 in the same quarter last year, making a 14% year on year growth. Our receivable for Q1FY26 are at around 120 days. We are also pleased to share that we have started receiving long overdue payments from Himachal Pradesh and Karnataka. Furthermore, we have received official confirmations of a pending amount from these and other states.
Thank you. Would you now like to open the floor for the question and answer session?
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on the Touchstone telephone. If you wish to remove yourselves on the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Also before we take the first question a request to all the participants, please limit your questions to two questions per participants and come back in the queue for a follow up question. The first question comes from the line of Surya Narayan Patra from Philip Capital. Please go ahead.
Surya Narayan Patra
Yeah, thanks for this opportunity sir and congratulations for the Rajasthan PPP contract. My first question is relating to the DPN Rajasthan contract. So obviously a large set of labs as well as the collection center visibility that now coming from this PPP contract. So if you can give some idea about what is the investment required here and in terms of the timeline of implementation over what period this would be implemented and is there any means scope of any delayed implementation here the way that we have seen in case of radiology centers or not. So that is the first point that if you can address.
Yash Mutha
Thanks Mr. Surenarayan. So a couple of questions in terms of Rajasthan. Firstly the Rajasthan project which we won recently after a hole that was there for various reasons. This project is a significant project for us in terms of the scale, the size. So we look at CAPEX in the range of about 200 to 250 crores which will help us achieve revenues in the range of about 300 to 350 crores on an annualized basis. In terms of the project ramp up, we expect the ramp up to start in the next couple of months which will probably grow about six to nine months and the revenue will start growing from the next financial year.
Surya Narayan Patra
Okay. Yeah, yeah. So Basically over a nine month period, this, all this 137 labs will be implemented. That is how one should believe it. Okay. So generally we had seen that, okay. Whenever there is a kind of a new PPP contract, the cost equation, the, the revenue equation could be different from the earlier ones. So given this center addition, so it is almost like double the kind of number of pathologies center that we are currently having. So what kind of impact that we can see to the revenue test for pathology business? Whether it would be a kind of similar to the existing trend or it would be better lower. Can you give some sense?
Yash Mutha
So in the current setup, the Rajasthan tender, the revenue per test would be more or less in the similar ranges. But as you know, the tender matures, the project matures, we expect the revenue per patient also to increase. And you know, as I said, this has a test menu is different from compared to current different tenders. So the pricing will be slightly differentiated. But I think on a Broadway basis it should be in line and we hope to see this revenue increasing in the subsequent quarters.
Surya Narayan Patra
Sure. My second question is about the rpl, the retail business venture. So is it possible for you to share also what is the kind of test volume that you would have achieved in the current quarter as well as the previous quarter which was the first quarter of our real RPL business? That is one. And also regards the. Can we use this Rajasthan PPP contract also to expand our B2C reach here?
Mitesh Dave
Yeah. Hi Mitesh. This side. Yeah. To answer your first question, maybe we would like to take it offline and Vivek will get in touch with you to share the patient volumes as requested. However, to answer your second query, wherein along with the Rajasthan PPP project, are we geared up or are we looking to expand our retail win? Yes, we are very much in line with the same for taking up retail along with the PPP Rajasthan project.
Surya Narayan Patra
Okay, just one point, sir. Here if I see the kind of segment, segment details what you provide for the retail revenue mix. So it looks like that the B2B is. B2B2C is really expanding significantly over the period, whereas the B2B is relatively lesser. So practically what is the initially I believe that, okay, it would be your B2B initiatives that would be helping you drive it. But what really is the focus and how do you want to really have the split between the B2B and B2C here?
Mitesh Dave
So hi again. Mitesh, this side. So while as our philosophy goes with the leveraging our overall PPP infrastructure that we have and which is more towards the direct to consumer or direct to patient approach. So B2C has always remained the core to us, however, and that was our focus as well. And which is shaping up the way in line you are seeing the revenue and parallel B2B looking to the most qualitative, affordable and accessibility. It is also adding up to what we have really envisaged at that point of time.
Surya Narayan Patra
Okay. Okay. So in terms of the quality of the revenue, both would be almost similar. There is no difference that you mean to say. So in terms of revenue. Yeah, yeah.
Mitesh Dave
So B2C is on the higher side as compared to B2B. But B2B. B2C is what we had envisaged point. Of time when we started. And B2B is heading up our accessibility, quality and affordability.
Surya Narayan Patra
Sure. Okay. Okay. Yeah. Thank you, sir. I’ll possibly be then the kivo.
operator
Thank you. The next question comes from the line of Lokesh Manik from Vellum Capital. Please go ahead.
Lokesh Manik
Yeah. Hi, good afternoon, Yash and team. My first question is on volume growth which has been quite subdued, you know, compared to what we have seen at industry level. At 10% we are at about 4%. Whether it be patient volume or test volume, however you look at it. So what are the factors that are driving this? If you can please elaborate.
Yash Mutha
If you see the volume that you know you’re referring to circuit is majorly which you know, if you compare on a like today it was a BMC which was in the past. But also there are some of the projects that we suspend the operations. You know, these have resulted. But now if you see on the retail side and overall holistically, they’re still sort of growth that is coming through from the overall business as such.
Lokesh Manik
Okay. So yes, if you can just give a sense of, you know, broadly utilization levels on the pathology and radiology. So this can give us an idea in terms of, you know, what is the growth expected going forward or will it. Will this, you know, 4, 5% be the growth for the entire year? So just get a sense on that.
Yash Mutha
So our growth in terms of overall growth, of course will be as we’ve been maintaining it will be higher than the industry peers and that is what we are aspiration working towards it from the different initiatives that we have done. So we expect the growth in the coming quarters also to be much better than what it has been shown today from a utilization perspective. Those details. I think we’ll ask Vivek to share the details with you.
Lokesh Manik
Sure, sure. And for this year, the radiology and pathology, how many centers or labs you’re planning to implement excluding Rajasthan tender.
Pawan Daga
Hi. Hi. Pawan, this side. So this quarter we operationalized three labs. And. Two cities and four MRIs all put together.
Lokesh Manik
Okay.
Pawan Daga
In the coming quarter certainly the remaining seven or eight MRI sites in Maharashtra, including Madhya Pradesh and one will be in the UP will be getting implemented and the remaining centers of a Jharkhand or one radiology, one city and MRI and the pathology will get implemented in Q2.
Lokesh Manik
Okay. Okay. Got it, Got it. That’s it for my side. Thank you so much.
operator
Thank you. The next question comes from the line of Ayush Chaturvedi from Arihan Capital. Please go ahead.
Ayush Chaturvedi
Yeah, thanks for the opportunity and congratulations on a good set of numbers. My first question would be if you could share a little more, if you could throw some light on the working capital situation this quarter. And so also if you could contextualize it with the ramp up in the detail that is happening, although it may seem a little modest, but then on an annualized base, I think on a 6 to 7% revenue contribution from revenue likely having a negative working capital cycle, how would that sort of of impact the overall working capital situation? Thanks.
Yash Mutha
So on the working capital side, like Pawan mentioned, we have been receiving payments from the projects, you know, that were overdue. We’ve also received confirmations and the money has started flowing in after there were some hiccups, procedural challenges that the governments were facing and those are coming through. And therefore, you know, from a working capital, I think we are back in the level that we normally believe are comfortable though our aspiration is to further improve on the working capital side on the retail side. The retail, of course that business is also scaling up rapidly which also further helps us in terms of the cash flows. Most of these are cash paying customers. So if you see from a blended business, this gives us a good position to be in and scale on with the current kind of network and infrastructure that we have built over the years.
Ayush Chaturvedi
Sure, yeah, that’s, that’s where I’m coming from. Just wanted to understand, you know, the impact that it could have on an overall working capital because I’m given to Understand, it’s become sort of an OEM on the returns. Obviously the higher margins also from the segment would help, but. Yeah, I mean if I could see that this would help in a bigger way in the working capital situation.
Yash Mutha
Yes, of course as retail expands, it will certainly also help us from the overall return ratios perspective. But as I said, Krishna, fundamentally if you see the model is PPP driven, retail will scale up and eventually both the Indians, when they come to a meaningful contribution that will also certainly result in better return ratios overall.
Ayush Chaturvedi
Right, right, right, right. So that’s, that’s also my side. Thanks.
Yash Mutha
Thank you.
operator
Thank you. The next question comes from the line of Ruchita from Iwealth. Please go ahead.
Rucheeta Kadge
Hello sir. Very good afternoon. So sir, my question was pertaining to the Rajasthan contact that we’ve got. So would like to understand the cost bump up that will come post this contract operationalizes. So you know, we do something like a revenue share to business partners. So which from the last few quarters is kind of stable, you know, as a percentage of revenue. How do we see this panning ahead? Because earlier I think when the Rajasthan contract was there, this was around 20, 24% of the revenue. So going ahead, how would this pan?
Yash Mutha
Yeah, so you’re right. In terms of Rajasthan project as it gets implemented, we’ll of course be leveraging some of these what we call as business partners and there will be an element of revenue share. This revenue share is a fraction of the revenue that has been generated. They handle or support us in various activities. We jointly deliver these diagnostic services. So the revenue share as a percentage will of course increase. But overall, if you see the revenue contribution that Rajasthan is expected to add to our overall top line, which is about in the range of 300, 350 crores, from that perspective, I think the revenue share as a percentage would not be very significant. When you look at it in the ratio as a percentage, of course it will increase, but that will happen as and when the revenues increase. And it is not like a fixed cost. It’s more of a variable in nature as the revenues increase. So do the fees to hospital be in line?
Rucheeta Kadge
Right. So this 8% can go to what like earlier this was like around 24% as well. Right. So this 8% can go to what.
Yash Mutha
I. It will be early for us now because as I said, we are just scoping out the Rajasthan, you know, project. The implementation maybe in the subsequent quarters we will give more clarity, but it will not be significantly high. It will be in the range of and you know, what we’ve always targeted to be in the range of 25 to 30% max. But we’ll share more details subsequently. I think Pawan.
Pawan Daga
Yeah, also Pawan, this slide. Yeah. So once the revenue sharing some of the component of the variable expenses, either in other expenses or an employee which will be cattled in the revenue share by way of a revenue sharing. So it will not gonna be an overall kitty, the sharing will increase. So other expenses will remain the same for an employee. So it’s in combination. So whenever we implement the project at an initial level, we have, we basically partner with the business coordinator or over a period we start absorbing them. And according to the revenue sharing, we go down over a period of time.
Yash Mutha
So a revenue share basically when we get to it, there are also certain cost components that they absorb. So on a margin basis, on a Krishna’s margin basis, there won’t be any impact. We’ll still be able to drive the margins that we project. In terms of sustainable EBITDA margins and pat margins, revenue share is like.
Rucheeta Kadge
Sorry, the margins will still be at 25, 26 even with the increase. Is my understanding. Right, sir. Hello. Hello.
Yash Mutha
You’re right. The same level, there won’t be an impact on the revenue because of, on the EBITDA because of the revenue.
Rucheeta Kadge
Understood, understood. This year we are planning for what kind of revenue growth? 15, 16. As in what you’ve done last year?
Yash Mutha
Yes, I mean we are targeting, as I said, you know, bettering the industry average, which, which should be higher than the numbers that exported.
Rucheeta Kadge
Okay, okay, okay, okay, okay. And the working capital for this quarter, sir, if you could, just because I kind of missed that point.
Yash Mutha
On the working capital, we’ve collected our money that was used from various authorities. So the, you know, payments have started flowing in. We’ve also received confirmations and at the same time the retail business is also ramping up. So on an overall basis, the working capital of course has improved from the previous quarters and we look forward to improving it in the subsequent quarters as well.
Rucheeta Kadge
Okay, understood. Thank you so much.
operator
Thank you. The next question comes from the line of Abdul Joshi from Bryanston Investment. Yes, sir, please go ahead.
Avadhoot Joshi
Yeah, thank you for the opportunity. First question on the RPM side though, the numbers look very promising right now. I think what we have envisaged and the numbers are looking very good. I congratulate team for that. First thing, on the EBITDA side of this rpl, where do we stand currently? Our understanding is as we are leveraging the existing infrastructure, we should be at least EBITDA positive. I would like to know what’s the current status on that? That’s my first question.
Mitesh Dave
Okay. Hi, thanks. First of all, thanks for encouraging words. So coming on to the questions which being asked around the EBITDA margins and looking to the leveraging the existing infrastructure. As you know we have started this operations almost six to eight months back or precisely a year back. So currently making a brand available, awaiting it out and various digitization automation and the processes initially it will incur the cost and that’s where we are currently going towards. However, with the given cost our revenues are promising for the future times. Further to that adding up the further manpower to the business and as a retail business to reach out to the desired audience, it is adding up the cost. But as and when the business will start maturing, you will see the positive impact around the EBITDA margins as well as in total cost structure.
Avadhoot Joshi
Okay, so at what level, at what volume levels do you expect this to happen?
Mitesh Dave
Market is pretty volatile for now. If you see overall be it is organized or the unorganized player. However we are trying to. We are aspiring to be there by FY26 end or something. But as and when the business and the quarters unfolds we’ll be in a better shape and position to give this better.
Avadhoot Joshi
Understood sir. So just a small request. We have been discussing on the RPL side for the last year or so time. It would be beneficial if you once I think that presentation or something comes from the your side. What are our plans on that? That would be really helpful for us also to understand how we are looking at it.
Mitesh Dave
So maybe Vivek and if need be I’ll be getting touch with you to take us through the retail plan ahead for the next two to three years.
Avadhoot Joshi
Understood. And just a small thing altogether Maharashtra on the radiology piece the implementation altogether 73 centers considering CTI and MRI at what’s the timeline we are initiating? Though not the 73 but major portion of it. When will we will be completing it.
Pawan Daga
So. Hi Pawan this side. So by end of Q3 majority of the implementation of the Maharashtra city and MRI will be getting done and rest. Of the sites which may will take. Care as soon as the site will be handed over by the authority that be taken care later.
Avadhoot Joshi
Understood. So major portion say 75 would be done by the Q3 of this year.
Pawan Daga
By Q3. End of Q3.
Avadhoot Joshi
Thank you. Thank you so much. That’s. That’s it.
Mitesh Dave
Thank you.
operator
Thank you. The next question comes from the line of Rikesh Parik from Motilal Oswald Financial Services Ltd. Please go ahead. Please go ahead with your question, sir.
Rikesh Parikh
Hello. Yeah, thanks for the opportunity and congratulations on good set of number. First on the retail side, sir, I just would like to understand we have reached 6% of the revenue. So going down the line, where do we see over here the next two years down the line as a percentage of revenue.
Mitesh Dave
PPP is also going at a faster pace. And the way retail is also adding up to that. We are looking for close to 5 to 8% of the total contribution in coming one one and a half years time.
Rikesh Parikh
Okay. And just adding up to them, where do you see the breakeven level as such for our retail venture means around reaching 20 crores kind of a revenue, a quarterly basis or something like that or anything. Where do we see making EBITDA break even in the retail venture means 20, 25 crores on a quarterly basis run rate or how do we look at it?
Mitesh Dave
We are looking to have a breakeven. By the end of February 6th. And for the contribution side in in next two years time as you asked to 18 to 20% of the total revenue.
Rikesh Parikh
Okay, thanks. So coming to the Rajasthan contract side, congratulations. At least at last we have signed the contract. How will be the rollout phased out for this country?
Yash Mutha
So on the Rajasthan project, this is Yash. On the Rajasthan project we are starting the rollout immediately. You know, it’s been long overdue. It will happen in phases. Of course. There are multiple labs, connection centers, satellite labs to be established. We expect that to roll out to happen over the period of next six to nine months. And again we are putting aggressive timelines to ensure that this gets rolled out in the next six to nine months so that we start getting meaningful revenues from the next financial year onwards.
Rikesh Parikh
Thank you. That’s it. From my side. Thank you.
operator
Thank you. The next question comes from the line of Aditya Chheda from increased asset management.
Aditya Chheda
My question is a. On historically we’ve seen that the investment to revenue turnover is around slightly around 0.7, 0.8. What would be the reason behind Rajasthan delivering almost 1.3 1.4x of revenue to the investment. And also if you can talk about the mix of radiology and pathology, this is our first question.
Yash Mutha
So if I understood you correctly in terms of you know, the investment versus the revenue, Rajasthan is a purely pathology project wherein there are pathology labs to be established where pathology collection centers to be established. So therefore if you see there the asset utilization or you know, revenue to investment will be higher compared to when you look at blended where there are more of radiology centers or radiology protection.
Aditya Chheda
Got it. And this. Sorry, you said this will be entirely pathology, right?
Yash Mutha
Correct.
Aditya Chheda
Okay. And one question. On this specific quarter we had around nine odds and value growth. So if you can call out reasons behind the change, what drove this value growth for us and also some you already comment on the volume growth, you know, the BMC contract, etc. If you can throw some more light on the reason behind the volume growth and your outlook on the thing.
Yash Mutha
Yeah. So on the volume growth there have been various initiatives that as a company or a management we’ve taken. Whether it is getting more awareness across various doctors who refer patients in terms of Krishna’s model which is basically affordable diagnostics where everyone can have access to some of the awareness campaigns or community level initiatives that we’ve taken have also given fruit and we are seeing that uptick coming up in the subsequent quarters as well. Which was also offset by some of the previous the BMC tender that was not there. Having said that, I think overall from a direction perspective and the kind of initiatives we’ve taken over the last couple of months, those have started bearing fruits and we see volumes also to keep up driving in the subsequent quarters.
Aditya Chheda
Got it. And last question, you said 250 crore of investment for Rajeshan. That would be over the next 12 months. And revenue is flowing from next financial year.
Yash Mutha
Correct.
Aditya Chheda
Okay, thank you.
operator
Thank you. The next question comes from the line of Bharat from equities. Please go ahead.
Bharat Celly
Yeah. Hi Grafton everyone. So just wanted to have a clarity on Rajasthan. So what is the duration of this contract? Whether it is a five year or a ten year contract.
Yash Mutha
Is a five year contract.
Bharat Celly
And as well here that timeline for this five years will start from the commercialization of the contract or from the period it was first awarded.
Yash Mutha
It starts from the commercialization of the contracts. When the revenue start flowing in, you know we get certain clearances from the authorities and from there on.
Bharat Celly
Earlier we were indicating that the overall capex for this contract will be around 150 to 200 crore. Now the CAPEX is looking bit higher. The overall scope of the contract has changed. From the initial point of view on how the things or how the corporate capex overall estimate has changed.
Yash Mutha
Certainly there have been enhancement in the scope. So from previously 33 mother labs it has now been announced to 42 mother labs. The hub labs which are about 117, they have been increased to 135 and the collection centers which are about 1,200 have now been increased to 1335. So if you see overall there has been enhancement in terms of the scope, the footprint that we’ll be having across the state of Rajasthan and therefore the capex has also increased which also basically helps us in terms of overall the revenue contribution from Rajasthan has also increased meaningfully from a prospect perspective.
Bharat Celly
And aren’t we going for a lease model for the equipment over here? Reagent leave or some sort of leave on sort of things?
Yash Mutha
No, from our experience, you know this purchasing, the recruitment helps from a strategic perspective. Again, there are certain tender requirements but we are evaluating both different models and we’ll take the right decision in as a minute.
Bharat Celly
Right. And what sort of working capital requirement will be there for this contract? Whether it is equivalent to what we are doing currently 120 days or it is higher or more?
Yash Mutha
No, I think Rajasthan historically has had a good working capital cycle. So we expect within 90 to 120 days.
Bharat Celly
Right. Last one. We have seen some disruption in Himachal Pradesh as well as Karnataka revenues over the last 1/4. In this quarter have we seen any improvement or this quarter also it is broadly the similar revenue rate similar to fourth quarter of last year.
Yash Mutha
No, of course there has been some improvement both in terms of the two projects along with the money that has been collected. So we see things getting normalized now.
Bharat Celly
From the peak how this overall Karmatica and Himachal Pradesh will be looking it is like 50, 60% lower from the peak revenues or how it is.
Yash Mutha
Except for Karnataka. Himachal is at consistent level. Karnataka, there were certain procedural changes done by the government because of which the Karnataka revenue came down. But Himachal is continuing at the existing levels and in fact improved. So there’s not a significant drop in the Himachal for this tender. Karnataka because of the profic changes there has been an impact but overall it is not a significant impact on the numbers per se.
Bharat Celly
Okay, so revenues have not materially come down here.
operator
Sorry to interrupt. May I request to join the queue for a follow up question please?
Bharat Celly
Sure.
operator
Okay, thank you so much. The next question comes from the line of Saloni from VALQ Investment advisory. Please go ahead.
Saloni Bavishi
Am I audible?
operator
Yes ma’, am, you’re audible. Please go ahead.
Saloni Bavishi
Okay, thank you for the opportunity. I have two questions. One is on the Rajasthan project. So also like you guided the case is around 200 to 250 crores. My question is that how do we plan to fund this capacity?
Yash Mutha
So we are currently evaluating multiple options. Like I just mentioned earlier, it will be a combination of our Internal accruals if required. We’re also exploring debt at some, you know, very efficient cost of capital as well as certain of these leasing or reagent models. Considering the size, we are excluding all these options and you know, in terms of our past experience of executing large PPV projects, we’ll try to use the best resource of capital for deployment and ensuring that our margins are intact.
Saloni Bavishi
Okay, thank you. And the next question is. Can you. Give me an idea as to what is our tender pipeline currently that we have applied and we possibly are expecting to win.
Yash Mutha
See, for US tenders, we continue to chase tenders and you know, the pipeline is does exist but it will be too early for me to give any details about the tenders as and when these tenders come up. We’ll be sharing those details.
operator
Thank you. The next question comes from the line of Mayur from Wealth Managers India Private Limited. Please go ahead.
Mayur Parkeria
Good afternoon to the management, to the entire team and congratulations for a decent set. Am I clear and audible?
operator
Yes sir. Please go ahead.
Mayur Parkeria
Thank you. So two questions from my side. One is on the Apulki side. Is it that the kind of equipments which will be required for cancer kind of situations will be, you know, are they in the region of 10 crores and above or how is it as far as the capex is concerned which will have to be done firstly and is there any change in terms of strategic intent with respect to our stake there either increase or how we look at. That’s on the Apulki and if you, if you can also now give some color on the status of where are we on the, you know, implementation of that. Aware, Apulk is on the implementation of two hospitals which was planned. Yeah, yeah.
Yash Mutha
There are three parts of your question. The first question is in terms of the equipments, what does it entail? So the equipments or the diagnostics that Krishna will be deploying is, you know, the same diagnostic equipment which includes a CT scan, MRIs kind of equipment. These are equipment which will also be used to serve the cancer patients that come in there. And that was one of the reasons or strategic reason why we partnered with Apulking. It gives us almost a 30 year visibility of revenues. As you also are aware, cancer and cardiac cases are on the rise.
And this also gives us a foot in the door in terms of Krishna centers being there in urban dense areas as well as capturing the oncology market, so to speak. So that is how we are seeing it currently from a development perspective. The Apulki hospital in Pune will be hopefully Commercial, the operations will start maybe in the next couple of months. And the other hospital, the construction is ongoing. So both these hospitals are at different stages of completion, which we expect and soon the revenues will start going through. I hope I’ve answered your questions. Yeah, largely just on the. So we will not get into PET scan kind of machines and all that. It will be MRI city only. Mri, CT and pathology.
Mayur Parkeria
Okay, okay. Okay, that’s great. Secondly, if you can, if you are, you know, just throw some high, some light on, you know, we set up a very large lab on the Kurula facility on the Mumbai site. And so we have not renewed this BMC contract. Any, any particular reason of why of that side. And if you can, if you would like to throw some light on that side of the. On the. On the Mumbai, on the BMC side contract.
Yash Mutha
On the BMC side, we had participated earlier, but when the tender conditions which we believe are not favorable in terms of overall financial viability and therefore we did not continue. As I said, what is sacrosanct at Krishna is a tender at the participant has to be. Be financially viable because that is the valuation that we all work towards. And therefore we decided not to pursue if it doesn’t make sense. The current lab also serves on the retail side which are leveraging to enhance volumes through the retail network. There are different types that we have done and we continue to utilize those lab for the retail operations as we continue to expand on seen on the retail side as well, the kind of growth we’ve seen. That lab also helps us process these incremental volumes that are coming through.
Mayur Parkeria
Okay, so to some extent there will be some delay in the payback period or kind of which will be there. But I should congratulate the kind of risk management you all have entered and you know, left the project in terms of if you know, I believe so the reason to leave that would be because as you said, tender, tender, some of the terms are not in favor. So it would be a risk management side. So that’s a great thing. But then from a financial side, will it slightly delay the kind of payback or the returns which we were planning? Because that was a bigger setup which we had and the collection centers, also a lot of centers which we had set up. So. Or do you think we’ll likely over the next two years be able to match that kind of expectation on the payback front?
Yash Mutha
If you see the volume that we had processed under the BMT tender had surpassed whatever was budgeted earlier. So in fact we did significant volumes and therefore the revenues that came through the BMC tender was much higher than what we charged even for the setup. So from that perspective I think we are much ahead of the curve. But of course, yes, we try to supplement it traditional sources of revenues to ensure that we further have a shorter payback and as pathologies. Normally, if you see from an asset light perspective, it’s a slightly less capital intensive compared to ratelogy. So from that perspective also pathology would have a better period especially for this lab as well. Thank you and wish you all the best.
Mayur Parkeria
I’ll come in the line. Thank you.
operator
The next question comes from the line of Shreyan Katani from SG Securities. Please go ahead.
Shreyans Katani
Hi, good afternoon. I just had one question on the pricing for the test. I see in the presentation, you know, the competitors versus what our tests are. So I understand that, you know, we have cost advantages on the operational side. But even if I look at the gross margin for, you know, the top few listed competitors like those don’t cover up. Like 20, 25% is their gross margin. Like sorry, 20 25% is the cost of material. So we’re not even covering up for that. So I’m trying to understand how like you’re able to provide pricing at that and also keep up with profitability. If you could just elaborate. I know this would have been asked earlier, but just wanted to get an idea on that.
Yash Mutha
Yeah. Hi Shank. So Shanks, if you see Krishna’s model basically is built on certain of these leverages or the cost leadership that we have had over the years with the ppp, there are certain cost synergies that we are able to, you know, I would say capitalize on, which includes whether it is rent or you know, the marketing cost. So a lot of these cost synergies are available for us. And therefore, along with the volumes that we have with these captive customers that we get at these PPP centers, we are able to have these sustainable margins in spite of our prices being almost 70% lower than the peers.
So this model has helped us scale. It also allows us to scale faster drive volumes. And with these volumes we’re able to have these margins, of course, you know, and the fleet of our equipment and assets that also has certain advantage when it comes to pricing. So overall we are able to achieve these kind of margins even with these low prices. I hope that answers your question.
Shreyans Katani
So like we are having an advantage even in terms of sourcing the reagents and stuff like that. Because I was thinking that those should be in line with what the Other competitors are able to source.
Yash Mutha
As I said there are certain volume that we do compared to the peers. We are at much higher volumes in some of these aspects. Then there are other cost synergies as I said in terms of various expenses that we have to incur. Whether it is the rent, electricity. If you see a marketing spends are probably the lowest in the industry. All of this help us to pass on the value to the end customer by offering lower prices and still having the sustainable margins which are comparable to the peers.
Shreyans Katani
Got it. Thank you.
operator
Thank you. The next question comes from the line of Sagar Sanghvi from ADD Capital. Please go ahead.
Sagar Sanghvi
Yeah, thank you for the opportunity. Good afternoon management and congrats on good set of numbers. Sir, very basic question on on your Rajasthan contract. So when I look at the press. Release it mentions the contract has been. Won with with a consortium partner tcil. So can you explain what is the role of pcil? What is the revenue share or profit share? How much capex do they would they incur along with us? Color on that would be helpful. And just a clarification, you mentioned rupees 300 to 350 crore of revenue. That is the size of the contract per annum for five years.
Yash Mutha
Yeah. So two parts of the question. The first part on regards to TC or Telecommunications Consultants India Ltd. That’s a PSU which we had partnered as a consortium partner. There were certain tender conditions, you know wherein they also allowed consortium partners and TCL met one of those conditions and therefore we took them as a partner in terms of. In terms of the. The, you know, the kind of revenue share or the investments. I think those are. I would suggest more we can share offline because these are free in terms of the contract structuring. But yes, TCL is a consultant partner and they’ll also have certain revenue share, not very significant but they’ll be partnering with us leveraging their strength as a PSU that we can also use in the PPP setup in terms of the revenue. So 300 to 350 crores annualized revenue is what we expect expect from the Rajasthan project to come on a mature level basis which we expect to start in financial year 2627 onwards.
Sagar Sanghvi
When do we expect the full potential of this revenue? Over next two years, three years or in the first year itself?
Yash Mutha
No, in the next one and a half to two years we expect the full revenues to come through the full potential.
Sagar Sanghvi
Okay. And sir, you mentioned ECI also there was a specification in the contract which allow you to partner or was there A requirement for a partnership with the psu.
Yash Mutha
There were certain tender conditions, you know, having certain documentation support. And then when we identified different companies, ECL was one of them. And therefore we decided to partner with them because they fulfilled some of the conditions as a consortium partner. And therefore we partnered with them and bid for this project.
Sagar Sanghvi
And so same would be for all these other say contactless Maharashtra or Himachal Pradesh.
Yash Mutha
No, if you see all other projects there were no specific such requirements which required us to go through a consortium. We normally go on our own strength which is, you know, the Krishna’s history and the credibility that we built over the years. For Rajasthan, when the tender was any charge, there were certain specific conditions.
Sagar Sanghvi
Perfect. Okay, thank you. I’ll take the rest of the questions offline. Thank you.
operator
Thank you. The next question comes from the line of Manik Bansal from Master Capital Services Ltd. Please go ahead.
Manik Bansal
Hi sir. Thank you for the opportunity. So my question is on the cost of material consumed. So it has increased from 22% to 25% sequentially which appears to have impacted the approximately 3%. So with this Rajasthan tender kicking in, so what is the impact do you see on this cost of material consumed? Because initially the revenue pickup will be very slow which might impact the bidder.
Yash Mutha
So on the consumption cost, the uptake that you see in the cost was also because of the fact of our facility revenues also increases. However, from a Rajasthan project perspective, as I said, this is a mega project. We are also trying to see how we can negotiate for better prices as well as the scale up. We are planning to ensure that there is to the extent lowest possible impact on the current existing EBITDA levels. And that is what we are working towards. You know, hopefully in the subsequent quarters we’ll be able to have a better clarity how the things unfold and whether it will have if any impact on the current EBITDA levels.
Manik Bansal
Okay. Okay. Thank you. And second question is on like if I look at the last quarter’s number on net block like it’s approximately 33% is semi mature. Right. So is it reasonable to assume that the semi mature block is largely comprised of radiology which is that we operationalized in Maharashtra earlier or if it, if it, it is not the case then can you provide a split between Radiology and pathology in chemistry?
Pawan Daga
So yeah, for one this side, this is a combination of radiology and pathology which are the project which has been implemented in last couple of years which fall under the semi mature latter un. So you will get an split of radiology and Pathology we can provide that really in an offline way will be okay for you.
Manik Bansal
Okay. Okay. Okay. Okay. Thank you. Thank you.
operator
Thank you. The next question comes from the line of Amruta from Wealth Managers India Private Limited. Please go ahead.
Amruta Deherkar
Thank you for this opportunity. So since we mentioned that we added three labs in the fourth and I would like to know where have we added these three labs. And in the Q4 presentation we had talked about adding one lab till FY27. I think that was fortunate for Jharkhand project. And the other comments were that the Jharkhand lab is yet to be implemented. So have we received any additional tender?
Mitesh Dave
Hi Mitesh, this is Sai. So these three labs have been added into the private space mainly to give out the more accessibility and the better tech. There is no as such new tender or something has add up to it.
Amruta Deherkar
Thank you. Do we have a kind of breakup out of the 120 lab that we have, how many of them pertain to the private sector?
Mitesh Dave
We may like to give this information offline.
Amruta Deherkar
Hello.
Mitesh Dave
Hello. I’m saying for this breakup around the private labs, PPP labs you may, Vivek will get in touch and we’ll give you the breakup.
Amruta Deherkar
And for the APLTY center we mentioned that the kind of the contract that we have is for PT mri. So do we have a scope for, you know where if the PET scan center can be added there we will be given the priority or will there be a separate tender for that?
Yash Mutha
So we’ve already executed agreements with APURTI wherein we’ll be setting up not only the CT scan MRI but the pathology labs as well. So this gives us access to integrated diagnostics inside the oncology hospitals and as I said with a 30 year revenue visibility at prices which are slightly better than the existing PPP prices and these centers are going to be in urban denser areas which also gives us basically access to the retail side of the business.
operator
Thank you ladies and gentlemen. Due to time constraint we’ll take this as the last question for today. I will now hand the conference over to Mr. Yash for closing comments.
Yash Mutha
Hi, thank you everyone for joining our Q1 FY26 earnings call. Hopefully we were able to address to all your queries. If there are any questions that remain unanswered, please feel free to reach out to our Investor Relationships head Mr. Vivek Jain and looking forward to interact with you again in the subsequent quarters. Thank you, have a good day.
operator
Thank you. On behalf of JM Financial Institutional securities limited that concludes this conference. Thank you all for joining us. And you may now disconnect your lines.