Why FII and DII are decreasing their stake in this Company…???
| FIIs + | 6.00% | 4.44% | 4.49% | 4.27% | 4.06% | 4.14% | 3.39% | 5.69% | 3.68% | 3.44% | 3.34% | 3.33% |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| DIIs + | 30.16% | 30.14% | 28.64% | 27.36% | 20.43% | 19.41% | 18.49% | 19.77% | 18.73% | 16.59% | 15.37% | 15.26% |
| Public + | 36.45% | 38.04% | 39.49% | 40.98% | 47.71% | 48.65% | 50.33% | 46.74% | 49.79% | 52.94% | 54.27% | 54.23% |
Disclosure: Already exited 2 years back…
Krsnaa Diagnostics and Medikabazaar Partner for an Unmatched Strategic Collaboration to
Revolutionize Advanced Diagnostics in India with a partnership worth ₹300+ Crore, to make
Healthcare more Accessible for all.
The uptick in the stock price in recent times is in line with the management’s aggressive steps with different strategies that are anticipated to improve bottom lines
Need to see whether retail bought or there are some strong names under Public.
If you observe, lately a lot of management meet announcements are coming.
D: Hold from lower levels, no plan of selling anytime soon until something warrants so.
Why there is continuos DII selling in this stock
Any suggestions on this?
Ksnaa Diagnostics
Growth Guidance:
Krsnaa Diagnostics has provided clear growth guidance in the earnings calls:
• The revenue for FY24 reached ₹620 crores, marking a 27% year-on-year growth, and the company expects to maintain a 25-30% growth rate going forward.
• Their EBITDA margins stabilized at around 24-26%, with plans to maintain this in the future.
• The company is focusing on aggressive expansion, particularly in the radiology segment, where several new tenders in states like Maharashtra and Madhya Pradesh have been secured.
• The B2C expansion is still at an early stage, but the leadership is optimistic about scaling it. A 40-lab expansion in the retail space is in progress, which aims to leverage existing PPP infrastructure for better profitability.
Risk Factors:
Delays in site handovers from government authorities have slowed down project execution, which is a significant operational risk. This is mentioned particularly in relation to the Maharashtra and UP tenders.
High receivable days, especially from government contracts (e.g., Himachal Pradesh), strain working capital. Delayed payments due to elections also increase risks related to liquidity.
The Rajasthan tender has been a legal challenge. The ongoing court case presents a risk, though the company has prepared to continue its growth even if the tender does not go through.
Some delays have occurred due to site handover and infrastructure-related issues, such as electricity problems, which have impacted the timely installation of equipment, especially in older tenders like the one in Uttar Pradesh . Despite these challenges, tis positioned to deploy the necessary equipment throughout FY24-25.
CT and MRI Installations in Maharashtra:
Peer comparison
Punjab is missing from the list !
Lots of growth levers
Over half of Krsnaa’s existing centres are new. The revenues and margins of these centres should increase. That itself has the scope to double the bottom line in the coming years.
There 45 new CT/MRI centres being implemented from existing contract wins leading to 25% more capacity in radiology plus new pathology labs and collection centres.
Finally some revenues from Krsnaa retail should kickin in a year’s time, with relatively low capex given they are leveraging their existing PPP infrastructure.
I am sharing Aditya Khemka’s views on Krsnaa Diagnostics below.
Please watch from 45 minutes on the timeline.
dr.vikas
Krsnaa Diagnostics -
Q2 FY 25 results and concall highlights -
Q2 outcomes -
Revenues - 186 vs 155 cr, up 20 pc
EBITDA - 51 vs 32 cr, up 58 pc ( margins @ 27 vs 20.5 pc )
PAT - 19.6 vs 10.5 cr, up 87 pc
H1 outcomes -
Revenues - 356 vs 295 cr, up 21 pc
EBITDA - 95 vs 64 cr, up 48 pc ( margins @ 27 vs 22 pc )
PAT - 37.5 vs 25.1 cr, up 50 pc
H1 Revenue and EBITDA breakdown -
Revenues -
Mature Centers - 183 cr
New Centers - 173 cr
EBITDA -
Mature centers - 66 cr
New centers - 29 cr
Krsnaa Diagnostics picked up 24 pc stake in Apulki Healthcare which operates hospitals ( Cardiac and Cancer care ) under PPP model. Due to this deal, Krsnaa will get to provide diagnostics services to Apulki Healthcare facilities for next 30 yrs. Currently, Apulki is in process of setting up 2 cancer and cardiac care hospitals in Pune + Mumbai. They eventually aim to set up 10 hospitals
Company’s current facilities -
178 - Radiology centers offering MRI + CT scans + X Ray tests ( doing aprox 1.5 lakh CT+ MRI scans / month + 6 lakh X Rays / month )
121 - Pathology processing labs with 3139 collection centers
These facilities are spread across 150 districts in India across 18 states and UTs
Company has recently won major contracts in Jharkhand, Assam, Maharashtra, MP and Odhisa. With these wins, company shall operationalise an additional 45 radiological centers, 01 Pathlab and 731 collection centers to fulfil the demand from these new order wins
Company has entered into a strategic partnership with United Imaging and Medikaa Bazaar. This collaboration represents a 300 + cr investment targeting the establishment of our 30 plus cutting edge imaging and pathology centers across Tier 1, Tier 2 and Tier 3 cities in India. This partnership, one of the largest and the most innovative in the Indian diagnostics space brings together the best of technology and health care expertise, significantly enhancing patient care and accessibility
United Imaging, known for its state-of-the-art MRI-CT, PET-CT and other advanced imaging solutions, along with Medikabazaar, extensive distribution capabilities have recognised Krsnaa Diagnostics as a pivotal partner due to our expansive reach and established reputation for delivering high-quality affordable diagnostic services
Company is debt free with cash on books @ 220 cr
Current receivables @ 243 cr. Out of these, 125 cr are due from 02 states and the rest 118 cr are from the rest 16 states. The two states mentioned above have agreed to release their dues ( late payments were primarily due to budgetary constraints ). All the company’s projects are backed by NHM and the company is confident of recovering all its dues
Capex in H1 stood @ 86 cr. Total capex for FY 25 is budgeted @ 170 cr
Company has started test marketing and soft launches of their B2C operations in a few cities. Seeing very encouraging response. Will go in for hard launches in a few cities ( 2-3 cities ) in a few months time ( by Dec 24 )
The award of Rajasthan tender for the company is still subjudice. Despite that, company believes that the growth path shall continue
Company believes it can sustain the strong H1 EBITDA margins in H2 as well
For company, their Radiology margins are higher than their Pathology margins
At the beginning of the year, company had guided for 25 pc kind of EBITDA margins. But now they r likely to sustain H1 type of margins in H2 as well which are around 27 pc. As more centers ramp up, margins tend to inch up due operating leverage
Because of company’s good work in Odisha, the state govt has asked them to set up an additional 600 centers - a clear validation for company ( and its shareholders … hopefully )
Company did a topline growth of 21 pc in H1. However, they are confident of maintaining full year revenue growth guidance of 25 pc !!! ( that simply means that H2 may be exceptionally strong )
Company has never written off any receivables from any state Govt throughout their history. So, the receivables stuck with 2 state Govt ( as history suggests ) should get recovered in not so distant future
The first 2 hospitals of Apulki Healthcare should get operationalised in FY 26 ( early FY 26 )
Disc: holding, biased, not SEBI registered, not a buy/sell recommendation
Krishna Diagnostics Limited (KDL) - Q3 FY25 Earnings Call Key Takeaways
Current Financial Performance (Q3 FY25 vs Q3 FY24)
Revenue: INR 1,745 million, up 10% YoY.
EBITDA: INR 466 million, up 23% YoY; EBITDA margin expanded by 279 bps to 27%.
PAT: INR 194 million, up 50% YoY; PAT margin expanded by 293 bps to 11%.
Diluted EPS: INR 5.9, up 48% YoY.
Receivables: Higher than usual due to delayed payments from Himachal Pradesh and Karnataka, averaging 60-65 days, with exceptions extending to 120 days. Management aims to reduce this to 90 days by fiscal year-end and normalize to 65-70 days in the next fiscal year.
Other Income: Elevated this quarter, attributed to gains from strategic capital reallocations, structured financial initiatives, and interest income from fixed deposits.
Current Financial Performance (9M FY25 vs 9M FY24)
Revenue: INR 5,311 million, up 17% YoY.
EBITDA: INR 1,416 million, up 39% YoY; EBITDA margin expanded by 417 bps to 27%.
PAT: INR 569 million, up 49% YoY; PAT margin expanded by 231 bps to 11%.
Diluted EPS: INR 17.3, up 47% YoY.
Receivables: Management has collected INR 300 million since January.
Operational Performance
Radiology & Pathology Mix: Radiology contributed 49% of revenue, while Pathology contributed 51%, marking the first quarter where Pathology exceeded Radiology. Management aims to maintain a 50/50 balance.
Volume & Realization Trends:
Radiology: Increasing realization per test, while volume trends will be shared offline.
Pathology: Revenue mix shift due to new projects, but a balanced contribution is expected.
Center Growth:
Existing Centers: Delivered a 36% EBITDA margin.
New Centers: Delivered a 17% EBITDA margin. Pathology centers typically mature in ~1 year, while radiology centers take ~1.5 years.
B2C (Retail) Centers: Launched under the RPL brand in four states, leveraging existing PPP infrastructure. Contributions expected to grow next fiscal year, with a target of 500 touchpoints by FY26.
Project Execution: Delays in Maharashtra CT/MRI projects and Madhya Pradesh installations due to site handover issues; six centers are expected to be operational by Q4 FY25.
Operational Challenges:
Process automation challenges in Karnataka and Assam.
BMC project is on hold; KDL is participating in a new tender.
Equipment Procurement:
For Aapulki Hospital, seven pieces of equipment were ordered two received, with the rest expected by late February or early March.
Future Outlook
FY26 Guidance: Targeting 25% sales growth for FY25, confident of achieving it by Q4. Other income is expected to be ~INR 50 million quarterly.
Long-Term Growth:
Expanding the retail footprint in metro, tier 1, 2, and 3 cities.
Leveraging technology, AI-enabled diagnostics, and seamless online booking.
ROCE: Currently ~10-12%, with expectations for improvement through strategic initiatives, including an asset-light model, B2C expansion, and operational efficiencies.
B2C Contribution: Expected to increase as a share of total revenue.
Government Initiatives: Positioned to capitalize on healthcare reforms outlined in the Union Budget 2025-26.
Concerns
Delayed Project Rollouts: Continued site handover and operational challenges.
Receivable Collection Delays: High receivables in certain states raise concerns about timely cash collection.
Competition: Rising competition as the sector shifts toward preventive healthcare and digital solutions.
ROCE Improvement: Addressing the current low ROCE relative to past investments.
Other Important Points
Union Budget 2025-26: Emphasizes public-private partnerships, increased funding, and benefits for diagnostic service providers.
Rajasthan Tender: Ongoing discussions with the government; management remains confident in a favorable outcome.
Employee Focus: New initiatives launched for employee engagement, upskilling, and job satisfaction through comprehensive training programs.
AI generated content do your due diligence.
Disc:- tracking.
Krsnaa Diagnostics Concall
Earlier Conclusion of BMC contract in Mumbai because budget got over BMC project is on hold; KDL is participating in a new tender.
More than expected delay in ramp up of Maharashtra CT project. Delays in site handovers. Roll outs to happen in Q4. 6 centers will get operational in Q4. more centers will get operational by March
or Q1FY26. 15 -20 crs impacted. confident of achieving 25% growth in FY25.
B2C contribution will be significant next FY. Launched under the RPL brand in four states, leveraging existing PPP infrastructure
Radiology - 49% - 40%
Pathology - 51% - 25% - 30%
Receivables: Higher than usual due to delayed payments from Himachal Pradesh and Karnataka, averaging 60-65 days, with exceptions extending to 120 days. Already received 30 cr. Rest will be received
by Feb or March.
Targeting 25% sales growth for FY25, confident of achieving it by Q4. Other income is expected to be ~INR 50 million quarterly.
I was very captivated by the thought that
Patho Labs vs Radiology Labs
Radiology requires real physical presence. While, Pathology Labs are nowadays “service on doors”.
Knowing Warren Buffett invested in Ulta Beauty, which has a lot of outlets all over the USA. Why? Major reason being Beauty products needs a trail and physical presence is needed.
Additional to the same reason, Radiology labs needs a physical presence.
That made me more interested in studying more about Krsnaa!
Fwiw, Warren Buffett has exited his position in Ulta Beauty in Q4
I wasn’t aware about it. However, what do you think about the fact that Radiology requires physical presence?
I mean they have competition in this radiology space too. Affordability is their major moat.
I am still not clear on how they will parallelly execute both B2G and B2C (RPL) Segments without avoiding conflicts of interest while leveraging the same infrastructure.
Few sticking points points from concall
Key Monitorable : Receivables, B2G execution ramp up, B2C revenue scale up
I think management is very optimistic about it,
“We have done 20 odd Krsnaa Business Associate (KBAs) on pilot basis to test the waters. We had success. Now the uptick will be like a hockey stick, as it’s just a copy paste, we don’t have to do any investment, as labs are already there,” Mutha said.
I have seen one interview of the management, let me pull it out once again. I will reply back.
