Are Krsnaa Diagnost. latest results good or bad?

Krsnaa Diagnostics has reported its financial results for the quarter ended September 2025, highlighting several operational trends. The company achieved a net profit of ₹23.95 crores, reflecting a quarter-on-quarter growth of 16.72%, a notable recovery from a slight decline in the previous quarter. This profit growth was supported by a 6.74% increase in net sales, which reached ₹205.99 crores, indicating sustained business momentum despite a competitive healthcare landscape.
The operating margin improved to 28.72%, up from 26.63% in the previous quarter, driven by better operational leverage as the company scaled its diagnostic centre operations. Additionally, the profit after tax margin expanded to 11.63%, showing the company's ability to convert revenue growth into profitability effectively.

However, the results also reveal challenges, particularly concerning rising interest expenses, which surged by 30% to ₹8.19 crores. This increase has raised concerns about the company's debt servicing capacity, as reflected in a declining EBIT-to-interest coverage ratio, now at its lowest in recent quarters. Furthermore, the return on equity (ROE) stands at 8.79%, which is below the sector average, indicating potential issues with profitability relative to shareholder equity.

Despite these challenges, Krsnaa Diagnostics maintains a relatively healthy balance sheet with low leverage, as evidenced by a net debt-to-equity ratio of just 0.15. The company continues to generate robust operating cash flow, which supports its ongoing expansion strategy.

In summary, Krsnaa Diagnostics demonstrated operational improvement in Q2 FY26 with significant profit and margin growth, but faces headwinds from rising interest costs and a relatively weak return profile compared to peers. The company saw an adjustment in its evaluation, reflecting these mixed operational trends.