Ladies and gentlemen, good day and welcome to the Krsnaa Diagnostics Limited's Q1 FY 2026 Earnings Conference Call hosted by JM Financial Institutional Securities Limited. Before we begin, I would like to remind all participants that today's call may contain statements that are forward-looking statements, including but without limitations, statements relating to the implementation of strategic initiatives and other statements relating to Krsnaa Diagnostics' future business development and economic performance. While these forward-looking statements indicate the assessments and future expectations concerning the development of our business, a number of risks, uncertainties, and other unknown factors could cause actual development and result to default materially from our expectations. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on a touchtone phone. Please note that this call is being recorded. With this, I now hand the conference over to Mr. Amey Chalke from JM Financial. Thank you and over to you, sir. Thank you, Sandhya. Good afternoon, everyone, and welcome to the Q1 FY 2025 Conference Call Of Krsnaa Diagnostics Limited. Joining us today on the call are Mr. Rajendra Mutha, Chairman and Whole-Time Director, Mr. Yash Mutha, Managing Director, Ms. Pallavi Bhatevara, Executive Director, Mr. Mitesh Dave, Group CEO, Mr. Pawan Daga, Chief Financial Officer, and Mr. Vivek Jain, Head, Investor Division. I would like to hand over now to Mr. Yash Mutha for his opening remarks. Thank you and over to you. Thank you, Am. Good afternoon, everyone, and thank you for joining Krsnaa Diagnostics' Q1 FY 2026 Earnings Call. Diagnostics in India is in the midst of a multi-year upcycling. Radiology is set to grow even faster as advanced modalities penetrate beyond metros, translating into rising volumes, greater formalization, and a clear opening for a scaled tech-enabled platform to win share. Krsnaa is uniquely positioned to lead this growth. We operate across 18 states and union territories, delivering integrated radiology, pathology, and immunology services. The only listed company of scale running a nationwide PPP engine. Our quality edge is unmatched with 54 NABL accredited labs, 31 NABH accredited radiology centers, and India's first CAP-accredited pathology lab in the government facility and the country's first NABH accredited teleradiology hub. In terms of our Q1 FY 2026 performance, which demonstrates scale with profitability, the revenue stood at INR 1,930 million, which is a 13% year-on-year growth, with the EBITDA at INR 524 million at about 27% margin, and the PAT stood at INR 205 million, which is about 11% margin. We achieved this by serving 5 million patients and processing almost 16 million tests at our various facilities. On the retail side, our retail momentum is accelerating. Our touchpoints have surged from 362 to 2,414 on a year-on-year basis, and the retail revenue has grown sharply. Our B2C contribution has increased meaningfully. The retail now contributes 6% of our overall group revenue, compounding quarter after quarter. Our moat is clear. We offer high-quality diagnostics at 70%- 90% below the prevailing market prices and still deliver margins which are comparable to the peers, powered by a PPP and the retail hybrid shared infrastructure and disciplined execution. In terms of our strategic priorities, PPP as a compounding engine continues. We are proud to announce the Rajasthan Award, which is a transformative achievement, with 42 mother labs, 135 satellite labs, and 1,300+ collection centers across all districts targeted for full operations by FY 2026 with material revenues starting from FY 2027. Retail, where we are strong, we are scaling rapidly in Maharashtra, Punjab, Assam, and Odisha, leveraging the PPP hubs for logistics, QA, and the brand trust. Radiology scale and the teleradiology leverage. On completion of our current order book, we will be operating 200+ CT scan MRI centers, ranking among Asia's largest. The NABH-accredited teleradiology hub enables rapid, high-quality reporting to the remotest sites. In terms of cost leadership, our cost leadership also with quality is intact. Our PATs, NMI solutions, automations, and the shared infrastructure across PPP and retail drive enduring cost advantages without compromising on accuracy or the turnaround times. In summary, we are a structurally advanced platform with diversified revenue streams, contracted growth from long-term PPPs, and accelerating high-margin retail. This is a business designed not just to grow with the market, but to take share from it consistently and profitably. With this, I'll now hand over to Mitesh Dave, our Group CEO, to take you through our P&L's momentum and the growth unfolding in our focus states. Thank you. Thank you, Mr. Yash. A very good afternoon to everyone. This side Mitesh Dave, I'm absolutely delighted to share the encouraging progress we have made in our journey to build India's most affordable, accessible, and integrated diagnostic service platform, spanning across radiology and pathology both, keeping quality at its core. Over the past year, we have significantly strengthened our presence in the retail diagnostics space. Our growth is backed by both value and volume, driven by high patient satisfaction, which is a true testament to our scalable model, sharp execution, and vast untapped potential that lies ahead. At the heart of our successes is our asset-light capital allocation model, enabling us to expand rapidly without compromising agility or service quality. Today, with 2,400 + Krsnaa touchpoints, clocked around 7x increase in just one year, we have created one of the most widely distributed diagnostic networks in India. Our leadership in the public-private partnership further strengthens our reach and gives us a foundation to scale retail even faster. We are on track to have retail contribution from close to 5%- 8% of total revenue by FY 2026, with clear levers in place to accelerate beyond that. Our growth strategy blends company-owned centers, franchisee touchpoints, collection points, deep digital integrations, ensuring affordable and accurate diagnostics wherever patients live, work, or seek care. Under our retail brand RPL, we are redefining what patients can expect from diagnostics: 24/7 accessibility, industry-leading turnaround times, transparent, and affordable pricing. Our expansion in Maharashtra, Punjab, Assam, and Odisha reflects a thoughtful approach, leveraging our PPP backbone while addressing fast-growing B2C demand in both urban and rural markets. Digital innovation is central to the transformation, from seamless health bookings to rapid, reliable result delivery. Our platform improves turnaround times, enhances clinical decision-making, and makes diagnostics more patient-centric. We are also building a strong B2B and B2C ecosystem, partnering with corporates, insurance companies, hospitals, and independent labs, as well as offering home-based diagnostics and preventive wellness services. This omnichannel approach ensures we are present wherever healthcare needs are there. Across everything we do, trust remains our most valuable currency. The trust of millions of patients inspires us to push boundaries, grow responsibly, and continuously improve the way we deliver care. The opportunity in front of us is enormous, and we are ready to capture it. With our strong execution capability, deep diagnostic expertise, and the growing credibility of RPL, we are poised to lead the next wave of retail diagnostics in India. Our mission is straightforward and ambitious: to be the doctor's most trusted partner and the patient's first choice for affordable, anytime, anywhere quality diagnostics. With that, I'm signing off and handing over to Mr. Pawan, Chief Financial Officer, to take us through the financial highlights. Thank you. Thank you, Mr. Mitesh. Good afternoon to everyone. Let me take a moment to briefly walk you through our financial performance for the quarter. Revenue for Q1 FY 2026 stood at about INR 1,930 million, reflecting a robust year-on-year growth of 13%, driven by sustained momentum in both radiology and pathology segments. Our focus on cost leadership and operational excellence has translated directly to our profitability. EBITDA grew by an impressive 19% year-on-year to INR 524 million. This performance resulted in a 120 basis point expansion in our EBITDA margin, which now stands at 27%. Profit after tax increased by 15% year-on-year to INR 205 million, with a margin of 11%. This demonstrates our continuous ability to not only grow the top line but also deliver the bottom line. Earnings per share of INR 6.25 for Q1 FY 2026 are up from INR 5.46 in the same quarter last year, making a 14% year-on-year growth. Our receivables for Q1 FY 2026 are at around 120 days. We are also pleased to share that we have started receiving long-overdue payments from Himachal Pradesh and Karnataka. Furthermore, we have received official confirmations of a payment amount from these and other states. Thank you. Would you now like to open the floor for the question- and- answer session? Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Also, before we take the first question, a request to all the participants: please limit your questions to two questions per participant and come back in the queue for a follow-up question. The first question comes from the line of Surya Narayan Patra from Phillip Capital. Please go ahead. Yeah, thanks for the opportunity, sir, and congratulations for the Rajasthan PPP contract. My first question is relating to the Rajasthan contract. Obviously, a large setup for our labs as well as the collection center visibility that's now coming from this PPP contract. If you can give some idea about what is the investment required here and in terms of the timeline of implementation, over what period this would be implemented and is there any sense of scope of any delayed implementation here the way that we have seen in case of radiology centers or not? That's the first point that if you can address. Sure. Thanks, Mr. Surya Narayan. A couple of questions in terms of Rajasthan. Firstly, the Rajasthan project, which we won recently after a hold that was there for various reasons, is a significant project for us in terms of scale and size. We look at CapEx in the range of about INR 200-INR 250 crores, which will help us achieve revenues in the range of about INR 300-INR 350 crores on an annualized basis. In terms of the project ramp-up, we expect the ramp-up to start in the next couple of months. We should probably grow for about six to nine months, and the revenue will start growing from the next financial year. Okay. Sorry. Yeah, yeah. Basically, over a nine-month period, this whole 137 labs will be implemented like it's our 100 believing. Yes. Okay. Generally, we had seen that whenever there is a kind of a new PPP contract, the cost equation, the revenue equation could be different from the earlier ones. Given this center addition, it is almost like double the kind of a number of pathology centers that we are currently having. What kind of impact can we see to the revenue per test for pathology business? Whether it would be kind of similar to the existing trend or it would be better, lower, can you give some sense? In the current setup, the Rajasthan center, the revenue per test could be more or less in the similar ranges. As the center matures, the project matures, we expect the revenue per patient also to increase. As I said, the test venue is different compared to our current different vendors, so the pricing will be slightly differentiated. I think on a broad way basis, it should be in line, and we hope to see this revenue increasing in the subsequent quarters. Sure. My second question is about the RPL, the retail business in general. Is it possible for you to share also what is the kind of test volume that you would have achieved in the current quarter as well as the previous quarter, which was the first quarter of our real RPL business? That is one. Also, regarding the, can we use this Rajasthan PPP contract also to expand our B2C reach here? Yeah, hi. Mitesh this side. To answer your first question, maybe we would like to take it offline, and Vivek will get in touch with you to share the patient volumes as requested. However, to answer your second query, we are in along with the Rajasthan PPP project, are we geared up or are we looking to expand our retail wing? Yes, we are very much in line with the same for taking up retail along with the PPP Rajasthan project. Okay. Just one point, sir, here. If I see the kind of segment details of what you provide for the retail revenue mix, it looks like the B2C is really expanding significantly over the period, whereas the B2B is relatively less. Practically, what is initially, I believe that it would be your B2B initiatives that would be helping you drive it. What really is the focus and how do you want to really have the split between the B2B and B2C here? Hi. Again, Mitesh this side. While as our philosophy goes with leveraging our overall PPP infrastructure that we have, which is more towards the direct-to-consumer or direct-to-patient approach, B2C has always remained the core to us. However, that was our focus as well, which is shaping up to the way in line we are seeing the revenue. Parallely, B2B, looking through the most commoditative, affordable, and accessibility, is also adding up to what we have really, and we started that part of the path. Okay. In terms of the quality of the revenue, both would be almost similar. There is no difference that you would do. So, B2C. In terms of revenue. Yeah. B2C is on the higher side as compared to B2B. B2B B2C is what we had analyzed at the point of the time when we started, and B2B is adding up to our accessibility, quality, and affordability. Sure. Okay. Thank you, sir. I'll pass it to the presenter. Thank you. The next question comes from the line of Lokesh Manik from Valluum Capital. Please go ahead. Hi. Good afternoon. Yes. My first question is on volume growth, which has been quite subdued compared to what we have seen at the industrial level at 10%. We are at about 4%, whether it be patient volume or test volume, however you look at it. What are the factors that are driving this? If you can please elaborate? If you see the volume that you've returned to subdued is majorly, you know, if you compare on our life track, it was the BMC, which was in the first. Also, there are some of the projects just we sustained the operation, you know, these have resulted. Once you see on the retail side and overall holistically, there's still a lot of growth that is coming through from the overall business aspect. Okay. Yes, if you can just give us a sense of, you know, broadly utilization level on the pathology and radiology, just to give us an idea in terms of, you know, what is the growth expected going forward? Will this, you know, 4% or 5% be the growth for the entire year? Just get a sense on that. Our growth in terms of overall growth, of course, will be as we've been maintaining it to be higher than, you know, the industry PL, and that is what we're aspiration working towards it. You know, from the different initiatives that we've done, we expect the growth in the coming quarters also to be much better than what it has been shown today. From a utilization perspective, those details, I think, we'll ask Vivek to share the details with you. Okay. Sure. I thought this year, on the radiology and pathology, how many centers or labs you are planning to implement, excluding Rajasthan center? Hi. Pawan this side. In this quarter, we operationalized three labs. Two CTs. Two CTs and four MRIs, all put together. Okay. Okay. In the coming quarter, certainly, the remaining seven or eight MRI sites in Maharashtra, including Madhya Pradesh, and one will be in UP, will be getting implemented. The remaining centers of Dhakar, one radiology, one CT, and MRI, and the pathology will get implemented in Q2. Okay. Okay. Got it. Got it. That's it from my side. Thank you so much. Thank you. Thank you. The next question comes from the line of Ayush Chaturvedi from Arihant Capital. Please go ahead. Yes. Thanks for the opportunity and congratulations on a big set of numbers. My first question would be if you could share a little more, if you could throw some light on the working capital situation this quarter. Also, if you could contextualize it with a ramp-up in the retail that is happening. Although it may seem a little modest, on an annualized basis, I think on a 6%- 7% revenue contribution from revenue, likely having a negative working capital cycle, how would that quarter impact the overall working capital situation? Thanks. On the working capital side, like Pawan mentioned, we have been receiving payments from the prior projects that were overdue. We've also received confirmations, and the money is starting to flow in after there were some hiccups, procedural challenges that the government was facing. Those are coming through. Therefore, from a working capital perspective, I think we are back in the level that we normally believe is comfortable. Our aspiration is to further improve on the working capital side. On the retail side, the retail, of course, that business is also scaling up rapidly, which also further helps us in terms of the cash flows. Most of these are cash-stream customers. If you see from a vending business, this gives us a good position to be in and scale on with the current kind of network and infrastructure that we have built over the years. Oh. Sure. That's where I'm coming from. Just wanted to understand, you know, the impact that it could have on an overall working capital because I'm able to understand it becomes sort of an overhang on the return. Obviously, the higher margins also from the segment would help. I mean, I could see that this would help in a bigger way in the working capital situation. Yeah, of course. As retail expands, it will certainly also help us from the overall return ratios perspective. As I said, Krsnaa, fundamentally, if you see the model is PPP-driven, retail will scale up. Even if you note the instance, you know, when they come to a meaningful contribution, that will also certainly result in better return ratios overall. Right. That's all from my side. Thanks. Thank you. Thank you. The next question comes from the line of Rucheeta from iWealth. Please go ahead. Hello, sir. Very good afternoon. My question was pertaining to the Rajasthan contract that we've got. I would like to understand the cost bump up that will come post this contract operationalizes. We do something like a revenue share to business partners, which from the last few quarters is kind of stable as a percentage of revenue. How do we see this panning ahead? Because earlier, I think when the Rajasthan contract was there, this was around 20%- 25% of the revenue. Going ahead, how would this pan out to be? Yeah, no, so you're right. In terms of Rajasthan projects, as it gets implemented, we'll, of course, be leveraging some of these, what we call as business partners, and there will be an element of revenue share. This revenue share is a fraction of the revenue that is being generated. They handle our support system in various activities. We currently deliver these diagnostic services. The revenue share as a percentage will, of course, increase. Overall, if you see the revenue contribution that Rajasthan is expected to add to our overall top line, which is about in the range of INR 300-INR 350 crore, from that perspective, I think the revenue share as a% will not be very significant when you look at it. In the range or as a percentage, of course, it will increase, but that will happen as and when the revenues increase. It is not like a fixed cost. It's more of a variable in nature. As the revenues increase, so do the fees to hospital will be in line. Right. This 8% can go to what? Earlier, this was around 24% as well, right? This 8% can go to what? It should be early for us now because, as I said, we are just scoping out the Rajasthan project, the invitation. Maybe in the subsequent quarters, we'll need more clarity. It will not be significantly high. It will be in the range of, you know, what we've always targeted to be in the range of 25%- 30% max. We'll share more details subsequently as we found. Yeah. Also, Pawan this side. Yeah. One, the revenue sharing to increase, so some of the component of the variable expenses, either in other expenses or in the employee, which will be catered in the revenue share by the revenue sharing. It will not going to be an overall city. The sharing will increase for other expenses, will remain the same for an employee. It's in combination. Whenever we implement their project at the initial level, we basically partner with the business coordinator. Over a period, we start absorbing them, and according to the revenue sharing, we go down over a period of time. A revenue share, basically, when it gets to it, there are also certain cost components that they absorb. On a margin basis, on a fixed margin basis, there won't be an impact. We'll still be able to drive the margins that we, you know, project in terms of sustainable EBITDA margins and PAT margins. Will the EBITDA margins still be at 25% even with the increase? Yes. Is my understanding right, sir? Hello? Hello? You're right. The EBITDA margins will be the same level. There won't be an impact on the EBITDA because of the revenue share. Understood. This year, we are planning for what kind of revenue growth? 15%, 16% as in what we've done last year? Yes. I mean, we are targeting, as I said, you know, bettering the industry average, which should be higher than the numbers that you quoted. Okay. Okay. Okay. Okay. The working capital for this quarter, sir, if you could just, because I kind of missed that one. On the working capital, we've collected our money that we've used from various parties. The payments have started flowing in. We've also received confirmations. At the same time, the retail business is also ramping up. On an overall basis, the working capital, of course, has improved from the previous quarters, and we look forward to improving it in the subsequent quarters as well. Okay. Okay. Understood. Thank you so much. Thank you. The next question comes from the line of Avadhoot Joshi from Bryanston Investment. Sir, if you interrupt, I found ice from your end. No, what do we know? Yes, sir. Please go ahead. Thank you for the opportunity. First question on the RPM side. Though the numbers look very promising right now, I think what we have in research and the numbers are looking very good. I congratulate the team for that. First thing on the EBITDA side of this, RPM, where do we stand currently? Our understanding is, as we are leveraging the existing infra, we should be at least EBITDA positive. I would like to know what's the current status on that. That's my first question. Okay. Yeah. Hi, Avadhoot. Thanks, first of all. Thanks for encouraging words. Coming on to the questions which have been asked around the EBITDA margins and looking to leveraging the existing infra, as you know, we have started the operations almost six to eight months back or precisely a year back. Currently, making a brand available, wearing it out for and think of various digitization, automation, and the processes, it will increase the cost. That's where we are currently going towards. However, with the given cost, our revenues are promising for the future times. Further to that, adding up the further manpower to the business as a retail business to reach out to the desired audience, it is adding up the cost. As and when the business will start maturing, you will see the positive impact around the EBITDA margins as well as in total cost structure. At what volume levels do you expect this to happen? The market is pretty volatile for now. If you see overall, be it organized or the unorganized player, we are trying to, we are aspiring to be there by FY 2026 end or something. As and when the business and the quarters unfold, we'll be in a better shape and position to give this better. Understood, sir. Just a small request. We have been discussing on the RPM side for the last year or so. It would be beneficial if, once a presentation or something comes from your side, you could share what our plans are on that. That would be really helpful for us also to understand how we are looking at it currently. Certainly, Avadhoot. Maybe Vivek, and if need be, I'll be getting in touch with you to take us through our retail plan ahead for the next two to three years. Understood. Just a small thing, altogether, Maharashtra on the radiology piece, the implementation, altogether 73 centers considering CT and MRI. What's the timeline we are revisiting, though not the 73, but major portion of it? When will we be completing it? Hi, Pawan this side. By end of Q3, majority of the implementation of the Maharashtra CT & MRI will be getting done. The rest of the sites, which may take care, as and as the sites will be handed over by the authority, that will be taken care later. Understood. Major portion, say, 75%, would be done by the Q3 of this year, right? Yes, by end of Q3. Understood. Thank you. Thank you so much. That's it for me. Thank you. Thank you. The next question comes from the line of Rikesh Parikh from Motilal Oswal Financial Services Limited. Please go ahead with your question, sir. As there is a response. Hello. Sir, go ahead. Thanks for the opportunity, and congratulations on a good set of numbers. First, on the retail side, sir, I just wanted to understand, we have reached the 6% of the revenue. Going down the line, where do we see over here the next two years down the line as a percentage of revenue? Yes, PPP is also growing at a faster pace, and the way retail is also adding up to that. We are looking for close to 5%- 8% of the total contribution in the coming one, one and a half years. Okay. Just adding up to that, where do you see the break-even level as such for our retail venture? I mean, around reaching INR 20 crore kind of a revenue on a quarterly basis or something like that or anything? Sorry, come again? Where do we see making a break-even in the retail venture? I mean, INR 20-INR 25 crore on a quarterly basis run rate, or how do you look at it? We are looking to have a break-even by the end of FY 2026, and for the contribution side in the next two years' time, as you asked, close to 18- 20% of the total revenue. Okay. Thanks. Sir, coming to the Rajasthan contract side, congratulations at last we signed the contract. How will be the rollout phase out for this contract? On the Rajasthan project, yes, we are starting the rollout immediately. It's been long overdue. It will happen in phases. Of course, there are multiple labs, collection centers, and satellite labs to be established. We expect that rollout to happen over a period of the next six to nine months. We are putting aggressive timelines to ensure that this gets rolled out in the next six to nine months so that we start getting meaningful revenues from the next financial year onwards. Thank you. That's it from my side. Thank you. Thank you. The next question comes from the line of Aditya Chheda from InCred Asset Management. Please go ahead. Hi. My question is, A, on historically, we've seen that, you know, the investment to revenue turnover is around, you know, slightly around 0.7x, 0.8x. What would be the reason behind the Rajasthan delivery, you know, almost 1.3x, 1.4x o f revenue to the investment? If you can talk about the mix of radiology and pathology in the Rajasthan tender, this is my first question. If I understood it correctly, in terms of the industry versus the revenue, Rajasthan is a purely pathology project wherein there are pathology labs to be established, pathology collection centers to be established. Therefore, if you see there, the asset utilization or revenue to investment will be higher compared to when you look at the vendor where there are more of radiology centers or radiology projects. Got it. Sorry, you said this will be entirely pathology, right? Correct. Okay. One question on this specific quarter. We had around 9% value growth. If you can call out the reasons behind the change, what drove this value growth for us? You already commented on the volume growth, the BMC contract, etc. If you can put some more light on the reason behind the volume growth and your outlook on the change. Yeah. On the volume growth, there have been various initiatives that, as a company or a management, we've taken, whether it is creating more awareness across various doctors who refer patients in terms of Krsnaa's, you know, the model, which is basically an affordable diagnostics where everyone can have access to. Some of the awareness campaigns or community-level initiatives that we've taken have also given fruit, and we have seen that uptick coming up in the subsequent quarters as well. This was also offset by some of the previous, the BMC tender that was not there. Having said that, I think overall, from a direction perspective, we and the kind of initiatives we've taken over the last couple of months, those have started bearing fruits, and we see volumes also to keep up driving in the subsequent quarters. Got it. Last question, you said INR 250 crore of investment for Rajasthan, that would be over the next 12 months, and revenue is flowing from next financial year, but understanding is correct? Correct. Okay. Thank you, Mitesh. Thank you. The next question comes from the line of Bharat from Equiris. Please go ahead. Yeah. Hi. Sorry, sir, just wanted to have a clarity on Rajasthan. What is the duration of this contract? Is it a five-year or a 10-year contract? Rajasthan is a five-year contract. Yes, over here, the timeline for this five years will start from the commercialization of the contract or from the period it was first awarded? It starts from the commercialization of the contract. When the revenue starts flowing in, we get certain clearances from the authorities, and from there on, we start. Got it. Earlier, we were indicating that the overall coverage for this contract will be around INR 150, INR 200 crore. Now, the capital is looking a bit higher. The overall scope of the contract has changed from the initial point of view on how the things or how the corporate capital overall estimates have changed? Certainly, there has been enhancement in the scope. From previously 33 mother labs, it has now been enhanced to 42 mother labs. The hub labs, which are about 117, have been increased to 135. The collection centers, which are about 1,200, have now been increased to 1,335. You can see overall, there has been an enhancement in terms of the scope, the footprint activity across the state of Rajasthan, and therefore, the CapEx has also increased, which also basically helps us in terms of overall the revenue contribution from Rajasthan has also increased immediately from a profit perspective. Are we going for a lease model for the equipment over here? You mean some sort of lease model type equipment? No. From our experience, us purchasing the equipment helps from a strategic perspective. There are certain tender requirements, but we are evaluating both different models and we'll take the right decision as and when it's. Right. What sort of working capital requirement will be there for this contract? Is it equivalent to what we are doing currently, 120 days, or is it higher or lower? No, I think Rajasthan historically has had a good working capital size, so we expect it in the next 120 days. Right. Last one, we have seen some disruption in Himachal Pradesh, as well as Karnataka revenue over the last one quarter. In this quarter, have we seen any improvement, or this quarter also it was going to be the similar revenue and rate similar to the first quarter of last year? No, of course, there has been some improvement both in terms of the two projects along with the money that we've collected. We see things getting normalized now. From the peak, how does overall Karnataka and Himachal Pradesh still be looking? Is it like 50% or 60% lower from the peak revenues, or how it is? Except for Karnataka, Himachal is at a consistent level. Karnataka, there were certain procedural changes done by the government because of which the Karnataka revenue came down. Himachal is continuing at the existing levels and, in fact, improved. There's not a significant drop in the Himachal Pradesh tender. Karnataka, because of the procedure changes, there has been an impact. Overall, there's not a significant impact on the numbers per se. Okay. Revenues have not materially come down there? Sorry to interrupt. May I request to join the queue for a follow-up question, please? Sure. Okay. Thank you so much. The next question comes from the line of Saloni from Val-Q Investment Advisory. Please go ahead. Hello. Am I audible? Yes, ma'am, you're audible. Please go ahead. Okay. Thank you for the opportunity. I have two questions. One is on the Rajasthan project. Also, like you validated, the CapEx is around INR 250 crore. My question is that how do we plan to fund the CapEx? We are currently evaluating multiple options, like I just mentioned earlier. It will be a combination of our internal approvals. If required, we're also exploring that at some, you know, very efficient cost of capital, as well as certain of these leasing or resale entity models. Considering the size, we're exploring all these options. In terms of our past experience of executing last two projects, we try to use the best resource of capital for deployment and ensuring that, you know, our margins are intact. Perfect. Thank you. The next question is, sir, can you give me an idea as to what is our tender pipeline currently that we have applied and we possibly are expecting to win? See, for us, tenders, we continue to chase tenders, and, you know, the pipeline does exist. It will be too early for me to give any details about the tender. As and when these tenders come up, we'll be sharing those details. All right. Thanks, sir. Thank you for that information. Thank you. The next question comes from the line of Mayur from Wealth Managers (India) Private Limited. Please go ahead. Good afternoon to the management, to the entire team, and congratulations for a decent set. Am I clear and audible? Yes, sir. Please go ahead. Okay. Thank you. Two questions from my side. One is on the Apulki side, you know, is it that the kind of equipment which will be required for cancer kind of situations, are they in the region of INR 10 crore and above, or how is it as far as the CapEx is concerned, which will have to be done firstly? Is there any change in terms of strategic intent with respect to our stake there, whether increase or how we look at it? That's on the Apulki. If you can also give some color on the status of where we are on the implementation of that, where Apulki is on the implementation of two hospitals which were planned. Yeah. Maybe there are three parts of the question. The first question is in terms of the equipment, what does it entail? The equipment or the diagnostics that Krsnaa will be deploying are the same diagnostic equipment, which include the CT scan, MRI kind of equipment. These are equipment which will also be used to serve the cancer patients that come in there. That was one of the reasons or the strategic reason why we partnered with Apulki. It gives us almost a 30-year visibility over revenues. As you're also aware, cancer and cardiac cases are on the rise. It also gives us a foot in the door in terms of Krsnaa centers being there in urban areas as well as, you know, capturing the oncology market, so to speak. That is how we are seeing it. Currently, from a development perspective, the Apulki Hospital in Pune will be, you know, hopefully commercial. The operations will start maybe in the next couple of months. The other hospital, the construction is ongoing. Both these hospitals are at different stages of completion, which we expect, and soon the revenues will start growing too. I hope I've answered your question. Yeah. Lastly, it's just on the push. We will not get into PET scan kind of machines and all that. It will be MRI, CT only. MRI, CT and Pathology. Pathology. Okay. Definitely. Secondly, if you can, if you are, you know, just throw some light on, you know, we set up a very large lab in the Kurla facility on the Mumbai side. We have not renewed this BMC contract. Any particular reason of why, how, you know, of that side? If you can, if you would like to throw some light on that side of the, on the Mumbai, on the BMC side contract. On the BMC side, we had participated earlier, but when the tender conditions, which we believe are not favorable in terms of overall financial viability, and therefore, we did not continue. As we said, what is sacrosanct at Krsnaa is a tender that we participate has to be financially viable, you know, because that is the value creation that we all work towards. Therefore, we decided not to pursue if it doesn't make sense. The current lab also serves on the retail side, which we are leveraging to enhance, you know, volumes through the retail network. There are different trials that we've done. We continue to utilize those labs for the retail operations as we continue to expand on everything on the retail side as well. The kind of growth we've seen, that lab also helps us process these incremental volumes that are coming through. Okay. To some extent, there will be some delay in the payback period or kind of which will be there. I should congratulate the kind of risk management you all have entered and, you know, left the project in terms of, if you know, I believe so, the reason to leave that would be because, as you said, tender on some of the terms are not in favor. It would be a risk management side. That's a great thing. From a financial side, will it slightly delay the kind of payback or the returns which we were planning? That was a bigger setup which we had and the collection centers, also a lot of centers which we had set up. Do you think we'll likely be able to, you know, over the next two years, be able to match that kind of expectation? On the payback stand, if you see the volume that we had purchased under the BMC tender has surpassed whatever was budgeted earlier. In fact, it is significant volumes, and therefore, the revenues that came through the BMC tender were much higher than what we had even for the setup. From that perspective, I think we are much ahead of the curve. Of course, yes, we try to supplement the traditional sources of revenues to ensure that we further have a shorter payback. As pathology is normally, if you see from an asset-light perspective, it's a slightly less capital intensive compared to radiology. From that perspective also, pathology would have a better payback period, especially for this lab. Okay. Great. Thank you. Wish you all the best. I'll come in the line for a second. Thank you. The next question comes from the line of Shreyansh Gattani from SG Securities. Please go ahead. Hi. Good afternoon. I just had one question on the pricing for the test. I see in the presentation, you know, the competitors versus what our tests are. I understand that, you know, we have cost advantages on the operational side. Even if I look at the gross margin for, you know, the top few listed competitors, like even those don't cover up like 20%, 25%. Is their gross margin, like, sorry, 20%, 25% is the cost of materials. We're not even covering up for that. I'm trying to understand how you're able to, you know, provide, you know, pricing at that and also keep up with profitability. If you could just elaborate. I know this would have been asked earlier, but just wanted to get an idea on that. Yeah. Hi, sir. Since if you see Krsnaa's model basically is built on certain of these leverages for the cost leadership that we have had over the years, with the PPP, there are certain cost synergies that we are able to capitalize on, which includes whether it is rent or the marketing cost. A lot of these cost synergies are available for us. Therefore, along with the volume that we have with these captive customers that we get at these PPP centers, we are able to have these sustainable margins in spite of our prices being almost 70% lower than the peers. This model has helped us scale. It also allows us to scale faster, drive volumes, and with these volumes, we're able to have these margins. Of course, the fleet of our equipment and the steps that also have certain advantage when it comes to pricing. Overall, we are able to achieve these kind of margins even with these low prices. I hope that answers your question. Got it. We are having an advantage even in terms of sourcing the reagents and stuff like that. I was thinking that, you know, those could be in line with what the other competitors are able to source it. No, as I said, there are certain volume, you know, that we do compared to the peers. We are at much higher volumes in some of these aspects. There are other cost synergies, as I said, in terms of various expenses that we have to incur, whether it is rent or electricity. If you see our marketing spends, they are probably the lowest in the industry. All of these help us to pass on the value to the end customers by offering lower prices and still having the sustainable margins, which are comparable to the peers. Got it. Got it. Thank you. Thank you. The next question comes from the line of Sagar Sanghvi from ADD Capital. Please go ahead. Yeah. Thank you for the opportunity. Good afternoon to the management and congrats on a good set of numbers. Sir, a very basic question on your Rajasthan contract. When I look at the press release, it mentions the contract has been won with a consortium partner, TCIL. Can you explain what is the role of TCIL? What is the revenue share or profit share? How much CapEx would they incur along with us? A color on that would be helpful. Just a clarification, you mentioned INR 300-INR 350 crore of revenue. That is the size of the contract per annum for five years. Yeah. Two parts of the question. The first part in regards to TCIL or Telecommunications Consultants India Limited, that's a PSU, which we had partnered as a consortium partner. There were certain tender conditions wherein they also allowed consortium partners, and TCIL met one of those conditions, and therefore, we took them as a partner. In terms of the kind of revenue share or the investments, I think those are, I would suggest, more we can share offline because these are fully in terms of the contract structuring. Yes, TCIL is a consortium partner, and they'll also have certain revenue shares, not very significant, but they'll be partnering with us leveraging their strength as a PSU that we can also use in the PPP setup. In terms of the revenues, the INR 300--INR 350 crore annualized revenue is what we expect from the Rajasthan project to come on a mature level basis, which we expect to start in the financial year 2026, 2027 onwards. When do we expect the full potential of this revenue over the next two years, three years, or in the first year itself? No, in the next one and a half to two years, we expect the full revenues to come through, the full potential. Okay. Sir, you mentioned TCIL. There was a specification in the contract which allowed you to partner, or was there a requirement for a partnership with the PSU? There were certain tender conditions, you know, having certain technical support. When we identified different companies, TCIL was one of them. Therefore, we decided to partner with them because they fulfilled some of the conditions as a consortium partner. We partnered with them and went for the project. Would the same be for all these other state contracts as well, Maharashtra or Himachal Pradesh? No. If you see all other projects, there were no specific requirements which required us to go through a consortium. We normally go on our own stand, which is, you know, the Krsnaa's history and the credibility that we build through the year. For Rajasthan, when the tender was initialized, there were certain specific conditions which we had to look out for a certain cost. Okay. Thank you. I'll take the rest of the questions offline. Thank you. Thank you. Thank you. The next question comes from the line of Manik Bansal from Master Capital Services Limited. Please go ahead. Hi, sir. Thank you for the opportunity. My question is on the cost of material consumed. It has increased from 22%- 25% sequentially, which appears to have impacted the EBITDA by approximately 3%. With this Rajasthan tender kicking in, what is the impact do you see on this cost of material consumed? Initially, the revenue pickup will be very slow, which might impact the EBITDA. On the consumption cost, the uptake that we've seen in the cost was also because of the actual cost factor, revenues also increasing. However, from a Rajasthan project perspective, as I said, this is a mega project. We are also trying to see how we can negotiate for better prices, as well as the scale-up we are planning to ensure that there is to the extent lowest possible impact on the current existing EBITDA levels. That is what we'll all work towards. Hopefully, in the subsequent quarters, we'll be able to have a better clarity how the things unfold and whether they have, if any, impact on the current EBITDA levels. Okay. Thank you. Second question is on, like, if I look at the last quarter's number on net block, it's approximately 33% of the semi-mature, right? Is it reasonable to assume that the semi-matured block is largely comprised of radiology machines that we operationalized in Maharashtra earlier? If it is not the case, can you provide the split between radiology and pathology in semi-mature? Yes, Pawan this side. This is a combination of radiology and pathology, which are the projects that have been implemented in the last couple of years, which fall under the semi-mature category. You will get a split of radiology and pathology. We can provide that in an offline way. It will be okay for you. Okay. Thank you. Thank you, sir. Thank you. The next question comes from the line of Amruta Deherkar from Wealth Managers (India) Private Limited. Please go ahead. Thank you for this opportunity. Since we mentioned that we added three labs in the quarter, I would like to gather how we added these three labs. In the Q4 presentation, we had talked about adding one lab to the SYMT7. I think that was for the next adjustment project. The earlier comments were that the adjustment lab is yet to be implemented. Have we received any additional tenders? Hi, Mitesh this side. These three labs have been added into the private space mainly to give out more accessibility and better tests. There is no SSU tender or something else added to it. Okay. Thank you. Do we have a kind of breakdown of how far from the 120 labs that you have, how many of them pertain to the private space and how many are on the PPP contract? We may like to give this information offline. Hello? Hello. I'm saying for this breakup around the private from government labs, PPP labs, you may be able to get in touch and we'll give you the breakup. Okay. For the Apulki center, you mentioned that the kind of contract that we had is for CT and MRI. Do we have a scope where, if the PET scan center is to be added there, we will be given the priority, or will there be a separate tender for that? We've already executed agreements with Apulki, wherein we'll be setting up not only the CT & X-Ray, MRI, but the pathology labs as well. This gives us access to integrated diagnostics inside the oncology hospitals. As I said, with the 30-year revenue visibility, at prices which are slightly better than the existing PPP prices, these centers are going to be in urban denser areas, which also gives us, you know, basically access to the retail side of the business. Okay, thank you. Yes, yes, thank you. Thank you. Ladies and gentlemen, due to time constraints, we'll take this as the last question for today. I will now hand the contents over to Mr. Yash for closing comments. Hi. Thank you, everyone, for joining our Q1 FY 2026 earnings call. Hopefully, we were able to address all your queries. If there are any questions that remain unanswered, please feel free to reach out to our Investor Relations team, Mr. Vivek Jain. I'm looking forward to interacting with you again in the subsequent quarters. Thank you. Have a good day there. Thank you. On behalf of JM Financial Institutional Securities Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect.