Krsnaa remains confident around a recovery of the receivables based on their ongoing interaction with officials. Krsnaa's track record on recovery of receivables so far remains clean with nothing lost on account of bad debts.
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Systematix Report
Krsnaa Diagnostics Ltd.'s Q4 FY25 revenue (Rs 1,861 million) was below our and consensus expectations but Ebitda (Rs 530 million) was inline. Revenue growth was lackluster (12% YoY). The pathology to radiology mix for the quarter stood at 50:50 and D2C contribution was 3.5% of revenue. Krsnaa expects D2C contribution to expand meaningfully in FY26 (5-8% of revenue).
The radiology contribution is expected to increase as new centers open and ramp up. The revenue growth during the quarter was impacted by a slowdown in Himachal and Karnataka revenues owing to extended receivable days. Krsnaa remains confident around a recovery of the receivables based on their ongoing interaction with officials. Krsnaa's track record on recovery of receivables so far remains clean with nothing lost on account of bad debts.
We expect a ~20% revenue growth for Krsnaa for FY26 and FY27. Expansion in their D2C business and a resolution of receivable collection challenges should support business growth.
We revise our estimates lower, but maintain our Buy rating on Krsnaa with a revised target price of Rs 879 based on 23 times FY27E earnings per share.
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