The analyst sees multi-year compounding potential in earnings and valuations.
Krsnaa Diagnostics shares surged 5% on Thursday. Over the last six months, it has gained nearly 19%. SEBI-registered analyst FrontWave Research has flagged it as a ‘smallcap with growth triggers.’
The stock has bottomed out on long-term charts, confirmed by Thursday’s big-volume buying. Institutions are showing fresh interest, validating their conviction, according to FrontWave Research.
Fundamental Drivers
Krsnaa Diagnostics holds a strong positioning in the public-private partnership (PPP) segment, where it is the only listed player with a bid win ratio of more than 75%.
Additionally, FrontWave noted that the Rajasthan mega PPP project is expected to add 42 mother labs, 135 satellite labs, and over 1,300 collection centers, and is projected to contribute annual revenues of ₹300–350 crore starting FY27, providing long-term visibility.
Alongside PPP growth, the retail expansion initiative has seen rapid scaling, with touchpoints rising sevenfold in a year to over 2,400. Retail operations currently contribute 6% of revenues and are compounding steadily, with a target of 700 centers by FY27 that would account for 18–20% of total revenue, they added.
What Works For Krsnaa?
The company’s cost leadership advantage sets it apart. It offers diagnostics services at 70–90% lower prices than its peers, yet maintains margins comparable to industry leaders, according to FrontWave.
Financial Performance
In the first quarter (Q1) of FY26, the company reported a 13% rise in revenues at ₹1,930 crore. Profit after tax rose to ₹205 crore, reflecting a 15% year-on-year growth.
EBITDA stood at ₹524 crore with a margin of 27%, marking an improvement of 120 basis points compared to the previous year. During the quarter, the company served over 5 million patients and processed 16 million tests.
Analyst Take
FrontWave Research noted that on the technical front, Krsnaa Diagnostics’ stock has broken out from a prolonged consolidation phase, with increasing volumes signaling institutional interest. Fundamentally, the business is supported by annuity-like revenues from PPP contracts, while retail expansion adds higher-margin growth.
They expect rerating with multi-year compounding ahead in both earnings and valuations as retail scales and Rajasthan project revenues kick in from FY27. FrontWave has pegged a target price of ₹1,127 to be achieved by March 4, 2026.
What Is The Retail Mood?
Data on Stocktwits shows that retail sentiment turned ‘bullish’ a day ago on this counter.
Krsnaa Diagnostics’ shares have declined 5% year-to-date (YTD).
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