Krsnaa Diagnostics Ltd. announces a new order win

Estimated upfront capex: the MCD award does not specify a project cost; it states that consideration depends on scan volumes and applicable rates ^[1]. Using the company’s disclosed MRI expansion benchmark of approximately ₹150 Cr for 17 centres ^[2], a rough site-level proxy is:

• ₹150 Cr / 17 centres = approximately ₹8.8 Cr per centre
• For three MCD sites: approximately ₹26–27 Cr

This should be treated as an illustrative proxy, not a company estimate. The benchmark appears to relate primarily to MRI expansion, while the MCD project requires both CT and MRI facilities; therefore, the final cost could be higher depending on equipment configuration, site-readiness expenditure, installation, and working capital.

Funding fit: Krsnaa’s latest reported consolidated debt-to-equity ratio is 0.57x in Q2 FY27, based on total debt of ₹596.43 Cr and equity of ₹1,038.6 Cr ^{[3] [4] [5]}. If the ₹26–27 Cr proxy were funded entirely through incremental debt, debt-to-equity would rise only to approximately 0.60x, derived as `(₹596.43 Cr + ₹26–27 Cr) / ₹1,038.6 Cr`. That implies a manageable incremental leverage impact, subject to the actual project cost and financing structure.

Internal accrual capacity: TTM EBITDA was ₹279.08 Cr and TTM PAT was ₹98.11 Cr ^{[6] [7]}. ICRA expects the company’s medium-term annual capex requirement of ₹60–100 Cr to be met through cash accruals ^[8]. On that framework, a ₹26–27 Cr MCD deployment would represent roughly 26–45% of the annual cash-accrual-supported capex envelope, and around 27% of TTM PAT as a simple earnings proxy. PAT is not equivalent to free cash flow, so the actual funding headroom depends on operating cash flow, working-capital absorption and vendor financing.

The key qualification is contractual: the headline 15 years comprise 10 years from commercial operation plus an extension of up to five years ^[1]. The base-tenure economics should therefore support the investment; the five-year extension is additional upside rather than a certainty.

The MCD award is best characterized as a variable-volume, cash-collection PPP—not a fixed-fee contract. The filing says revenue will depend on the actual number of CT and MRI investigations performed at the three sites and the applicable rates; it does not specify a guaranteed fixed fee or an explicit revenue-sharing percentage with MCD. ^[1]

What is known about the MCD economics

• Structure: Krsnaa finances, establishes, operates and maintains the facilities on a “cash PPP” basis. ^[1]
• Revenue driver: Actual scan volumes multiplied by the applicable CT/MRI rates. ^[1]
• Contract footprint: Three Delhi hospital sites, with a 10-year concession from commercial operation and an extension of up to five years. ^[1]
• Timing: Each site is expected to reach commercial operation within 180 days of site handover, subject to tender conditions. ^[1]
• Contract value: Not determinable upfront under the disclosed terms. ^[1]

Comparison with other state PPP contracts

A like-for-like comparison of revenue per scan or revenue per centre is not currently possible. The cited company and rating-agency material reports the broader PPP footprint—including 190 CT/MRI centres across 18 states and Union Territories as of March 2026—but does not provide contract-level revenue, scan volumes, rate cards or centre-level economics for the existing state projects. ^[8]

The company has also disclosed large state-level awards, such as Maharashtra coverage involving 17 MRI and 17 CT machines, but the cited disclosure does not provide the corresponding revenue per machine, scan or centre. ^[9]

Implication: MCD should be modelled as a volume-sensitive cash-pay opportunity with long concession visibility, but its revenue density cannot yet be benchmarked against Rajasthan, Maharashtra, Himachal Pradesh or other PPP contracts. Any estimate based on consolidated revenue divided by the number of centres would be misleading because the revenue base includes multiple businesses and geographies, not just comparable PPP radiology centres.

Scale: The MCD award is a three-hospital, three-site PPP for CT and MRI facilities. However, the disclosure does not specify the number of machines at each site, so it cannot be converted reliably into either “three centres” or a machine count. A quantified scan-volume estimate also could not be confirmed; the company states that project consideration will depend on the actual number of CT/MRI investigations and applicable rates. ^[1]

Ramp-up: The Service Provider Agreement is to be executed within 30 days of the 2 November 2026 Letter of Award, while the Commercial Operation Date for each site must be achieved within 180 days of its site handover. ^[1] The operative timeline is therefore site-specific and tied to handover, not to the award date.

The disclosure does not provide a utilization curve, initial scan run-rate, target peak utilization, or the time required after commissioning to reach steady state. Accordingly, the defensible interpretation is:

• Commissioning window: up to 180 days after handover for each hospital. ^[1]
• Utilization ramp: likely begins after each site’s Commercial Operation Date, but the duration to peak utilization is not specified.
• Revenue visibility: long-term, with a 10-year concession from Commercial Operation Date and an extension option of up to five years, but near-term revenue magnitude remains volume-dependent. ^[1]

Thus, MCD is strategically meaningful but not yet quantifiable as a Maharashtra-scale capacity addition; the key execution markers are site handover, machine installation, COD achievement and subsequent scan-volume build.