🩺 At a Glance
Chandan Healthcare is building a low-cost diagnostic empire across North India—clocking ₹230 Cr revenue, ₹24 Cr profit, and ROE of 27%. Sounds like a mini Dr. Lal, right? Except, it trades at just 1/2 the P/E. But here’s the diagnosis: rising working capital stress, promoter dilution, and zero dividend yield could stall its vitals.
1. 🎣 Hook – “The Bharat Dr. Lal or Just a Tier-2 Blood Test Hustler?”
If you’ve ever driven through Lucknow, Prayagraj, or Jaipur and seen a shiny blue board saying “Chandan Diagnostics”, congrats—you’ve witnessed the NSE-SME journey of Chandan Healthcare.
The company IPO’d in 2024. Profits are growing. Valuation is modest. Even ROE looks healthy.
But… so does the working capital bloat. And promoter holding has dropped to 49.4%.
So the question is: Is this a compounder in disguise—or another healthcare hype cycle?
2. 🧪 WTF Do They Even Do?
Chandan runs diagnostic centers—focused on:
- Pathology labs
- Radiology services (X-rays, CT, MRI)
- Satellite labs and sample collection points
🧬 Where?
- Uttar Pradesh ✅
- Uttarakhand ✅
- Rajasthan (Jaipur) ✅
- Tier-2/3 cities like Gorakhpur, Kanpur, etc.
🧠 Strategy:
- Affordable pricing
- Scalable satellite-center model
- Local branding (but no app ecosystem yet)
3. 📈 Financials – Profit, Margins, ROE, Growth
| Metric | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Revenue (₹ Cr) | 120 | 137 | 177 | 230 |
| EBITDA (₹ Cr) | 2 | 9 | 26 | 41 |
| EBITDA Margin | 2% | 7% | 15% | 18% |
| Net Profit (₹ Cr) | –1 | 3 | 16 | 24 |
| ROE | – | 6% | 21% | 27% |
| EPS (₹) | –0.56 | 1.68 | 8.14 | 9.07 |
📈 3Y Sales CAGR = 24%
🚀 3Y PAT CAGR = 180%
🔥 ROCE = 28.1% (better than many listed peers)
4. 📊 Valuation – Cheap, Meh, or Crack?
- CMP: ₹186
- Market Cap: ₹455 Cr
- P/E: 20.5x
- P/B: 3.7x
🧮 Compared to peers:
| Company | P/E | ROE | OPM |
|---|---|---|---|
| Dr. Lal | 48x | 24% | 28.3% |
| Vijaya | 70x | 20% | 40.1% |
| Krsnaa | 27.7x | 9.7% | 28.8% |
| Chandan | 20.5x | 27.1% | 18.0% |
Verdict: Undervalued vs peers on P/E, despite comparable or better ROE.
5. 🔥 What’s Cooking – News & Triggers
🍲 Recent Buzz:
- Launched Chandan Medical Centres — integrated primary care + diagnostics
- Expanded lab network into Tier 2/3 towns (high-growth underserved)
- Clarification sought from NSE re: Q4FY25 financials (could spook markets)
- No deviation in IPO funds utilization (₹70 Cr cleanly used)
🧯 Risks:
- Promoter holding fell from ~70% to 49.4%
- Cash from ops was –₹29 Cr in FY25
- Working capital days shot up from 63 → 116
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Borrowings | ₹21 Cr | ₹42 Cr | ₹48 Cr |
| Net Worth | ₹27 Cr | ₹41 Cr | ₹122 Cr |
| D/E Ratio | ~0.8x | ~1x | 0.39x ✅ |
🧠 IPO money helped reduce leverage
But borrowings are rising again with expansion → needs monitoring
7. 💸 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹4 Cr | –₹6 Cr | ₹2 Cr | ₹0 |
| FY24 | ₹2 Cr | –₹15 Cr | ₹16 Cr | ₹3 Cr |
| FY25 | –₹29 Cr | –₹36 Cr | ₹67 Cr | ₹2 Cr |
🚨 Negative operating cash in FY25 = red flag
Likely due to receivables, CAPEX-heavy expansion, or upfront infra costs
8. 📉 Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 28.1% ✅ |
| ROE | 27.1% ✅ |
| OPM | 18.0% |
| Debtor Days | 74 |
| Inventory Days | 106 |
| CCC | 93 Days |
| Working Capital Days | 116 |
🧾 Chandan is profitable and efficient, but working capital trend is deteriorating—needs to streamline collections.
9. 💊 P&L Breakdown – Show Me the Money
- FY25 Revenue: ₹230 Cr
- EBITDA: ₹41 Cr
- PAT: ₹24 Cr
- EPS: ₹9.07
- PAT Margin: 10.4%
Decent margins for diagnostics, but far from Dr. Lal-level (which has 28–30% NPM)
10. 🩻 Peer Comparison – Who Else is Testing?
| Company | Rev (Cr) | PAT (Cr) | ROE | P/E | OPM |
|---|---|---|---|---|---|
| Dr. Lal | ₹2461 | ₹488 | 24% | 48x | 28% |
| Vijaya | ₹681 | ₹144 | 20% | 70x | 40% |
| Metropolis | ₹1331 | ₹145 | 12% | 60x | 22% |
| Chandan | ₹230 | ₹24 | 27% | 20.5x | 18% ✅ |
Clearly a small fish, but punching well above its weight.
11. 🧬 Misc – Promoter Holding, Shareholding, Drama
| Holder | Mar ‘25 |
|---|---|
| Promoter | 49.43% |
| FIIs | 3.86% |
| DIIs | 6.32% |
| Public | 40.38% |
📉 Promoter holding dropped 20.5% QoQ → probably due to IPO/preferential dilution
⚠️ If it drops further below 50%, control issues could arise
12. 🎯 Fair Value Range – Doctor’s Orders?
Let’s assume FY26 PAT = ₹32 Cr (33% growth)
P/E Range = 22–28x (discount to Dr. Lal)
- FV Market Cap = ₹704 – ₹896 Cr
- Shares = 2.4 Cr
→ FV/Share = ₹293 – ₹373
📍 CMP = ₹186
🎯 Upside Potential = 57% to 100% if growth sustains + cash flow improves
🧠 EduInvesting Verdict™
Chandan Healthcare is the “Dr. Lal for small towns”—growing fast, capital-efficient, and surprisingly undervalued.
But it comes with:
- ⚠️ Rising WC stress
- 🛑 Promoter dilution
- 🧾 Negative cash from ops
Still, in a market where diagnostics players trade at 45–70x P/E, this 20x ROE machine looks cheap AF.
💊 High risk, but high-quality bet on Bharat’s healthcare boom.
✍️ Written by Prashant | 📅 July 1, 2025
Tags: Chandan Healthcare, SME Diagnostics Stock, North India Healthcare, FY25 Results Chandan, SME vs Dr Lal Pathlabs, Healthcare SME Stocks India, EduInvesting Diagnostics Deep Dive, Promoter Dilution Stocks
