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Krsnaa Diagnostics Limited Q1 FY25 Earnings Conference Call Summary
Notification and Call Details • Date of notification: August 13, 2024 • Earnings call held on: August 7, 2024 • Transcript available on company website • Key executives present: Chairman, Whole-Time Directors, CFO • Moderator: Jainil Shah from JM Financial
Company Vision and Strategy • Commitment to expanding quality diagnostic services in underserved regions • Vision: "LET’S DO GOOD" • Leveraging public-private partnerships (PPP) for growth • Focus on enhancing retail operations and adopting new technologies
Financial Highlights • Q1 FY25 revenue: Rs. 170 crores (22% YoY growth) • EBITDA: Rs. 44 crores (39% YoY growth) • Net profit: Rs. 18 crores • Net debt-free status with strong cash position
Operational Developments • New centers planned in Tier-2 and Tier-3 cities • Operationalization of CT scan centers in Maharashtra • 40 labs established to enhance retail presence • New Group CEO: Mitesh Dave
Q&A Session Insights • Concerns about lower margins in new centers (12%) vs. mature centers (38%) • Pathology services have lower margins than radiology • Capital expenditure (CAPEX) plan of Rs. 170 crores for the year • Revenue breakdown: 55% radiology, 45% pathology • Tele-reporting contributes 7-8% of overall revenue
Government and Regulatory Considerations • Clarification on differential pricing for retail and government customers • No restrictions on charging different rates for private and government patients
Future Outlook • Growth target of 25-30% for the year • Focus on integrating pathology and radiology services • Financing arrangements secured for future projects
Conclusion • Management's commitment to transparency and operational updates • Encouragement for further inquiries from participants
Krsnaa Diagnostics Limited Earnings Call Summary (May 21, 2024)
Compliance and Overview • Submitted earnings call transcript to BSE and NSE on May 27, 2024. • Discussed audited financial results for the quarter and year ending March 31, 2024.
Key Achievements • Chairman Rajendra Mutha highlighted: • Installation of 148 CT and MRI service centers. • Plans for further expansion with additional tenders. • Establishment of Krsnaa Retail Private Limited for B2B and B2C operations. • Commitment to growth despite ongoing legal matters in Rajasthan.
Financial Performance • Fourth Quarter FY '24: • Revenue: INR 166 crores (25% YoY growth). • EBITDA: INR 45 crores (28% increase, 27% margin). • Net Profit: INR 19 crores (11% margin).
• Full Fiscal Year: • Total Revenue: INR 620 crores (28% growth). • EBITDA: INR 147 crores (18% growth). • Net Profit: INR 57 crores (9% margin).
• Challenges with increased receivables, particularly from Himachal Pradesh.
Leadership Changes • Appointment of Mr. Mitesh Dave as Group CEO to enhance B2C initiatives and operational management.
Growth Strategy • Focus on underserved Tier 2 and Tier 3 cities in the Indian healthcare market. • Projected 25-30% CAGR in revenue growth over the next two years. • Expected stabilization of gross margins around 78% by Q1 or Q2 of the next fiscal year.
Operational Insights • Tele reporting centers contribute 9% to overall revenue. • Initial project costs impacting EBITDA margins, but expected to stabilize. • Plans for significant capital expenditures if the Rajasthan project proceeds.
Debt and Receivables Management • Aiming to remain debt-free, but some working capital debt may be necessary. • Collections from Himachal Pradesh may slow due to elections but are expected to resume.
Future Outlook • B2C revenues projected to initially represent 2-3% of total revenue, with growth expected. • Management encourages further inquiries through investor relations.
Krsnaa Diagnostics Limited Earnings Call Summary (February 17, 2024)
Company Performance Highlights • Earnings Call Date: February 13, 2024 • Key Executives Present: Chairman Rajendra Mutha, CFO Pawan Daga, Managing Director Pallavi Bhatevara • Awards: "Best Lab Chain of the West" • Significant Achievements: • Secured major radiology tenders in Maharashtra and Madhya Pradesh • Announced leadership changes: • Pallavi Bhatevara resigns as Managing Director • Yash Mutha promoted to Joint Managing Director • Dr. Prashant appointed as CEO • Growth Target: 30% CAGR
Financial Performance • Revenue: INR 158 crores (34% YoY increase) • Net Profit: INR 13 crores • Debt Status: Net debt-free; lease liabilities confirmed at INR 20 crores • Trade Receivable Days: Expected normalization by year-end
Operational Strategy • Focus Areas: • Expansion in Tier 2 and Tier 3 cities • Establishment of a wholly owned subsidiary for B2C business • Revenue Mix: • Radiology: 60-65% • Pathology: 30-35% • Future Goals: Achieve a balanced revenue ratio of 50%-50% between radiology and pathology
Capital Expenditure (Capex) Plans • Projected Capex for FY '25: INR 150-200 crores • Potential Increase: Capex could rise to INR 450-500 crores if a tender in Rajasthan is won • Funding Strategy: Internal accruals, vendor credit, and selective debt
B2C Initiatives • Current Contribution: 1%-2% of overall revenue • Pricing Strategy: Competitive pricing despite higher costs compared to B2G
Operational Updates • New Laboratories and Collection Centers: Ongoing launches • Home Collection Services: Expanded under BMC contract • Rajasthan Project: Awaiting High Court decision for revenue timeline
Q&A Highlights • Debt Policy: Aim to remain debt-free unless project efficiency necessitates debt • Billing Structure: 70% credit-based, 30% cash-based • Revenue per Patient: Currently at INR 400, with strategies to improve through cross-selling and package offerings • Government Initiatives: Discussions on a national essential diagnostic list could expand opportunities
Conclusion • Growth Trajectory: Krsnaa has expanded significantly over the past five years, focusing on large state contracts and selective tender participation. • Future Outlook: Stable EBITDA margins around 25% anticipated, with ongoing considerations for balancing growth and financial metrics.
Krsnaa Diagnostics Limited Earnings Call Summary (November 6, 2023)
Compliance and Key Executives • Submitted earnings call transcript to BSE and NSE on November 10, 2023. • Featured executives: Chairman Rajendra Mutha and Managing Director Pallavi Bhatevara.
Market Growth and Expansion • Indian diagnostic market growth driven by government initiatives and health awareness. • Expansion of operations with new laboratories and collection centers. • Recognition as "National Diagnostic Chain of the Year." • Focus on Tier-II and Tier-III cities for accessible diagnostic services.
Financial Performance (Q2 and H1 FY2024) • Total revenues: Rs. 295 crores, a 25% year-on-year increase. • Expansion of pathology operations with 40 labs planned, 22 operational. • Normalized EBITDA: Rs. 39 crores (27% growth), normalized net profit: Rs. 18 crores (17% growth). • Optimism for future margin improvements as projects mature.
Project Updates and Challenges • Radiology projects: CT scan project in Maharashtra underway. • B2C segment expected to contribute 10% to revenues in the future. • Seasonal business activity noted, with Q3 typically lower due to holidays. • Targeting 30% CAGR growth rate, sustainable EBITDA margins of 26% to 28%.
Financial Outlook for FY2024 • Targeting a 25% EBITDA margin on a reported basis. • Q4 expected to show strong performance due to strategic initiatives. • Rajasthan project delays due to elections, but groundwork continues.
Revenue Projections and Government Relations • Projected additional Rs. 140 crores from new tenders in Rajasthan for FY'25. • Base business growth rate of 20-30%, with mature segments at 8-10%. • Confidence in overcoming potential retendering issues due to favorable court orders. • Speculation on government delays linked to election-related decision-making.
Margin Expectations and Financial Health • Anticipated 25% margin for FY'24, with improvements as new projects contribute. • Increased receivable days acknowledged, but confidence in recovering dues. • Minimal capital expenditure on the Rajasthan project.
Conclusion • Overall optimism about achieving growth targets through ongoing and new projects. • Call concluded with thanks and an invitation for further questions directed to Investor Relations.
Krsnaa Diagnostics Q1 FY24 Earnings Conference Call Summary
Company Overview • Date of Call: August 17, 2023 • Submission: Transcript submitted to BSE and NSE on August 24, 2023 • Management Present: Chairman Rajendra Mutha, Managing Director Pallavi Bhatevara
Financial Highlights • Total Revenue: Rs. 140 crores (24% YoY increase) • Normalized EBITDA: Rs. 35 crores (22% growth, 25% margin) • Normalized Net Profit: Rs. 17 crores (19% growth, 12% margin) • Expansion: Integrated 6 new pathology labs and 252 collection centers • CAGR Growth Expectation: 30-35% over the next two years
Strategic Developments • Market Potential: Diagnostic industry in India projected to reach Rs. 1,360 billion by FY26 • Recent Wins: Favorable court ruling in Rajasthan, significant tender win in Assam • Service Expansion: Launched home sample collection services in Punjab
Future Outlook • Rajasthan Project: Expected to generate Rs. 300 crores in FY25; agreement execution pending • Growth Drivers: Projects in Punjab, Himachal Pradesh, Assam, and Odisha • CAPEX Plans: Rs. 250 crores projected, primarily funded through internal accruals
Operational Insights • Revenue Distribution: Approximately 30% from private sources, 70% from government contracts • Hiring Practices: Direct employment to meet tender requirements • B2C Initiatives: Wellness packages and home collection services gaining traction
Tender and Contract Management • Re-tendering: Existing contracts often include renewal clauses • CAPEX for Rajasthan: Projected at Rs. 200 crores, with additional minimal CAPEX for other projects
Technology and Innovation • App Development: For service bookings, limited usage among target audience • Franchise Model: Initiated to enhance sample collection
Conclusion • Call Closure: Pallavi Bhatevara thanked participants and invited further questions to the Investor Relations team.
Krsnaa Diagnostics Limited Q4 FY23 Earnings Conference Call Summary
Overview • Date of Call: May 29, 2023 • Submission Date: June 3, 2023 • Key Executives: Chairman Rajendra Mutha, Managing Director Pallavi Bhatevara • Industry Context: Indian diagnostic service industry valued at ~$15 billion, projected CAGR of 11.5%
Key Highlights • Growing Demand: Increased need for affordable, high-quality diagnostic services due to lifestyle diseases, insurance penetration, and government initiatives. • Accreditation: First NABH-certified teleradiology hub in India. • Network Expansion: Secured nine tenders to add radiology and pathology centers, focusing on Tier 2 and Tier 3 cities.
Financial Performance (FY23) • Core Revenues: Rs. 486 crores (15% YoY growth) • EBITDA: Rs. 124 crores (25% margin) • Net Profit: Rs. 62 crores (13% margin) • Patient Volume: Served over one crore patients. • Expansion: Pathology labs increased from 49 to 99; collection centers from 534 to 1,090; radiology centers grew by 24% to 133.
Future Growth Initiatives • Revenue Guidance: Double-digit growth expected in FY24, higher in FY25. • Capex Plans: Projected between Rs. 200 to 250 crores for FY24, funded through internal accruals and vendor credit. • Specialized Tests: Strategy to offer competitive pricing through home collection services and expanded lab network.
Operational Insights • Gross Margin Concerns: Expected stabilization around 81% as pathology projects mature. • EBITDA Margin Improvement: Anticipated 1-2% increase as new centers mature. • Pricing Strategy: Rates higher than government prices but lower than market prices due to revenue sharing with hospitals.
Q&A Highlights • Revenue Guidance Changes: Adjustments due to operational delays; commitment to double-digit growth remains. • ROCE Discussion: Mature centers yield better margins; pathology offers better ROCE due to lower capital requirements. • Growth Targets: Aim to exceed Rs. 700 crores in revenue by FY25, with gradual growth strategy focusing on public-private partnerships (PPP).
Conclusion • Optimism for Future: Management expressed confidence in growth trajectory, contract visibility, and maintaining/improving EBITDA margins.
Krsnaa Diagnostics Q3 FY23 Earnings Conference Call Summary
Call Details • Date: February 14, 2023 • Submission Date: February 20, 2023 • Participants: • Chairman: Rajendra Mutha • Managing Director: Pallavi Bhatevara • CFO: Pawan Daga • Host: Equirus Securities • Communication Signed By: Nikhil Deshpande (Company Secretary)
Key Highlights • Market Growth: • Demand for affordable diagnostic services in India projected to reach $15 billion with an 11.5% CAGR.
• Operational Expansion: • Secured significant pathology tenders in Maharashtra and Odisha. • New centers operationalized in Punjab and Himachal Pradesh. • Launched Genexus system for molecular pathology.
• Financial Performance: • Core revenues: INR 118 crores (12% YoY growth). • Stable EBITDA margins: 25%. • Challenges in operating cash flow due to rising receivables.
Financial Insights • Receivables and Capex: • Receivables typically extend beyond 90 days due to year-end payment cycles. • Capex incurred: INR 107 crores in first nine months; expected additional INR 22-25 crores in Q4.
• Gross Margins: • Fluctuations noted: 70-75% in early FY '21 to 88-89%, recently declining to 84-86%. • Decline attributed to the end of a profitable Rajasthan project and reduced revenue-sharing fees.
Tender and Revenue Projections • Rajasthan Tender: • Not renewed; previous worth INR 70 crores annually. • Bidding for a larger tender valued at INR 450-500 crores.
• New Tender Estimates: • BMC: Estimated annualized revenues of INR 30-40 crores. • Odisha: Estimated annualized revenues of INR 50-55 crores. • Anticipated revenue from BMC in FY '25: INR 20 crores.
Operational Challenges • Punjab Tender Losses: • Losses of INR 3-4 crores per quarter confirmed. • Revenue from Punjab centers projected at INR 60-70 crores next fiscal year.
• Revenue Ramp-Up Delays: • Attributed to government changes and cash-driven business nature. • Optimism for future revenue growth through community outreach.
Strategic Discussions • Retail Strategy: • Cautious expansion into home collection services due to cost and logistical challenges. • Gradual growth in franchise model and urban home collection services.
• Data Analysis Improvements: • Efforts to capture patient demographics and improve data systems.
Conclusion • Future Outlook: • Projecting INR 700-750 crores for FY '24. • Aim to double revenue from FY '22 levels to around INR 900 crores. • Investor Relations: • Invitation for further questions through the Investor Relations team.