Krsnaa Diagnostics enters B2C segment with chain of 600 diagnostic centres

Mainly a PPP and B2B player, the Pune-based chain offers disruptive pricing

Pune headquartered Krsnaa Diagnostics, primarily a public-private partnership (PPP) and business-to-business (B2B) player, is now set to enter the business-to-consumer (B2C) segment with a chain of 600 diagnostic centres across the country. Krsnaa’s entry into the B2C space is likely to change the industry dynamics on pricing, felt analysts.

This is because Krsnaa is known for disruptive pricing – it offers imaging and pathological tests at discounts of 45-60 per cent and 40–80 per cent to the market rates, respectively.

At present, close to 60 per cent of Krsnaa’s revenues come from the PPP segment, and the remaining are from B2B sales to hospitals. It offers services to several private hospitals in the country.

Pallavi Jain, Managing Director of Krsnaa Diagnostics said she expects the share of PPP and private (including hospitals and B2C business) to have a 50:50 share in the next three years.

The company will strengthen its footprint across Maharashtra, Himachal Pradesh, Punjab, West Bengal and Rajasthan, with the spread across metros, tier-2 and tier-3 cities. “The centres will be equipped to offer specialised services in precision medicine, genetics, genomics, and molecular diagnostics, along with the routine investigations of biochemistry and serology, which are commonly used in routine diagnostics tests. The centres will offer dedicated services for women’s health (hormones), diabetes monitoring, cardiac health, and cancer care,” the company said in a statement here.

A Mumbai-based analyst who tracks the company said that Krsnaa would not be able to offer CGHS rates in the B2C business, but one can be sure that its pricing would be disruptive. “There will be an impact of diagnostic pricing by other players as a result of Krsnaa’s entry into this space,” he added.

In a March report, Edelweiss has noted: “Krsnaa is expected to clock one of the best growth among listed peers, driven by 10-15 per cent growth in existing centres, fuelled by new projects and single-digit price increases.”

“Moreover, tele-radiology centres enable it to reach remote locations at significantly low prices given low cost of reporting,” the brokerage added.

The diagnostics industry is underpenetrated in rural areas. Higher government spending and initiatives are expected to drive the PPP model faster (14-17 per cent), versus the overall diagnostics industry (13-14 per cent).

“Moreover, an influx of e-pharmacies is ushering in a change in sector dynamics. Krsnaa has an edge here. Its attractive prices coupled with quality offerings will work in Krsnaa’s favour,” Edelweiss said.

Chief Operating Officer, Ravinder Sethi said, “Currently, we operate most of our centres through hospitals…With this launch, we are getting closer to the patients to ensure we are present in places where there is unmet needs of healthcare delivery. Krsnaa Diagnostics is one of the largest diagnostics players offering disruptive competitive prices to its customers.”