Despite Q4FY26 revenue falling short of estimates, Systematix maintains its Buy rating on Krsnaa Diagnostics with a target price of ₹833, representing significant upside from the current market price of ₹539.20. According to reports from The Hindu BusinessLine, the broker's confidence is based on revised estimates and expects the company to deliver strong growth trajectory in the coming years. The recommendation comes despite the quarter's revenue miss, with the broker citing the company's operational efficiency improvements and strategic positioning.
The company's Q4FY26 results showed mixed performance with revenue at ₹192.60 crore, representing growth of 3.5% year-on-year and 6.3% quarter-on-quarter, but falling 7% below estimates. As reported by The Hindu BusinessLine, EBITDA at ₹54.90 crore materially beat expectations with growth of 3.6% year-on-year and 18% quarter-on-quarter, driven by lower than expected operational costs. The profit after tax (PAT) came at ₹41.70 crore, showing remarkable growth of 102% year-on-year and 171% quarter-on-quarter, aided by a fair valuation gain of ₹22.20 crore related to Apulki Healthcare during the quarter. However, excluding this one-off gain, the adjusted PAT stood at ₹10.20 crore and declined year-on-year and quarter-on-quarter, indicating underlying operational performance.
The B2C (retail) segment demonstrated steady performance with revenue at ₹15.80 crore remaining flat quarter-on-quarter. According to reports from The Hindu BusinessLine, the B2C business is now supported by 3,500+ touchpoints including 500+ franchisees and collection centres. The retail contribution reached around 8% of revenue during FY26 and management expects this share to move into double digits going forward, indicating strong expansion in the retail segment.
Management has adopted a conservative approach by lowering guidance on the Rajasthan project for FY27 to ₹100-150 crore due to timing uncertainties in the ramp-up phase. As reported by The Hindu BusinessLine, the company will capitalise ₹530 crore in FY27 in fixed assets towards the Rajasthan project and radiology expansion. Despite temporary Q1 pressure from Rajasthan manpower deployment, management aims to maintain EBITDA margins around current levels while expecting the project to contribute meaningfully to future growth. The broker had expected an escalation in operational costs in Q4 owing to upfront costs related to the Rajasthan project implementation, but the actual results showed better-than-expected cost management.
Based on revised estimates, Systematix projects strong growth for Krsnaa Diagnostics with FY26-28E Revenue/EBITDA/PAT CAGR of 19.9%/18%/7.2% respectively. According to reports from The Hindu BusinessLine, the broker maintains its target price of ₹833 based on 23x FY28E EPS, reflecting confidence in the company's expansion strategy and operational efficiency improvements despite the current quarter's revenue miss. The projections factor in the company's strategic initiatives including the Rajasthan project and retail expansion, positioning Krsnaa Diagnostics for sustained growth in the diagnostic services sector.
