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:
- Project Delays and Receivables:
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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.
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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.
- Court Case and Tender Risks:
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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.
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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.
- Pathology Margin Pressure:
- The pathology segment, which has a lower margin than radiology, could impact overall profitability. As pathology centers are still in the ramp-up phase, their contributions are lower, which creates a risk in achieving higher margins.
CT and MRI Installations in Maharashtra:
- Out of the 73 planned installations in Maharashtra, 21 CT centers have already been operationalized, with the remaining 18 CT centers soon to be completed.
- Additionally, Krsnaa has signed an order for 17 new MRI machines and plans to install 5 MRI machines by the end of FY25 MP Installations.
- The company has also secured agreements for 5 MRI centers in Madhya Pradesh, with two expected to be operational by year-end.
- In FY25, Krsnaa plans to operationalize 14 CT machines and 5 MRI machines in a phased manner.
These installations, once completed, are expected to contribute significantly to Krsnaa’s revenue growth.
Peer comparison
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