Krsnaa Diagnostics Ltd Q4 FY22 Earnings Conference Call Insights

Key highlights from Krsnaa Diagnostics Ltd (KRSNAA) Q4 FY22 Earnings Concall

Q&A Highlights:

• Praveen Sahay of Edelweiss asked that why the other financial assets is jumped up on a YoY basis. Yash Mutha ED said it’s because majority of chunk in other financial assets is mainly FDs of more than 1 year and some of the IPO proceeds that is not utilized is parked under FDs which is also lying in other financial assets.

• Prasheel Shah from CapGrow Capital asked about clinics, the time it takes for a center to mature and the payback period. Yash Mutha ED said that for CT Scan the payback is in the range of 3-5 years max, MRI up to 5 years. And the centers normally mature within 3 years of time. From pathology perspective, the payback could be couple of months.

• Prasheel Shah from CapGrow Capital enquired about the difference between the capacity utilization of a mature center and a center that itself is evolving. Yash Mutha ED said when KRSNAA starts any diagnostic center with CT scan on the radiology side, it ranges from 10% capacity utilization for a mature center and it could go up to almost 60%, 70%.

• Prasheel Shah from CapGrow Capital asked about the dip in average revenue per patient and its outlook. Yash Mutha ED replied it’s not a dip, it was largely attributable to COVID. YonY, there has been an improvement. Looking at KRSNAA’s model, prices are almost 40-80% lower than market rate and has the potential to increase in future.

• Prasheel Shah from CapGrow Capital enquired about the kind of test conducted under telereporting. Yash Mutha MD answered it is all the CT scans, MRI and the X-ray business, which is the Radiology business.

• Purvi from Kotak Securities  asked if over the next  quarters the receivables may get a little spiked up and in 4Q it will get corrected. Yash Mutha ED answered it’s cyclical. Sometimes it varies between Q2 and Q3, but normally by Q4 is where KRSNAA will expect the same trend to continue.

• Utkarsh Maheshwari of Reliance GI asked about the thought process behind getting into B2C. Yash Mutha ED replied KRSNAA’s B2C market will be differentiated by leveraging the existing network of centers where it is already present.

• Pritesh Chheda of Lucky Investment asked that over the next two years what would be the number of centers KRSNAA would have, excluding current commitments. Yash Mutha ED replied that assuming KRSNAA completes all its existing projects in hand and without any new projects, it should have around 150 radiology centers vs. 107 today. In pathology about 1,000 vs. 600 today and telereporting 1,500 vs. 1,381 today.