Pune-based Krsnaa Diagnostics, primarily a public-private partnership (PPP) and business-to-business (B2B) player, is now poised to enter the business-to-consumer (B2C) segment with a chain of 600 diagnostic centers in all the country. . Krsnaa’s entry into the B2C space is likely to change the industry’s pricing dynamics, analysts said.
This is because Krsnaa is known for its disruptive pricing: It offers imaging and pathology tests at discounts of 45 to 60 percent and 40 to 80 percent of market rates, respectively.
Currently, about 60 percent of Krsnaa’s revenue comes from the PPP segment, with the rest coming from B2B sales to hospitals. It offers services to several private hospitals in the country.
Pallavi Jain, CEO of Krsnaa Diagnostics, said she expects PPP and private participation (including hospitals and B2C businesses) to have a 50:50 share in the next three years.
The company will strengthen its presence in Maharashtra, Himachal Pradesh, Punjab, West Bengal and Rajasthan, with distribution in metropolitan areas, tier 2 and tier 3 cities. “The centers will be equipped to offer specialized services in precision medicine, genetics, genomics and molecular diagnostics, along with routine biochemistry and serology investigations, which are commonly used in routine diagnostic tests. The centers will offer services dedicated to women’s health (hormones), diabetes management, heart health and cancer care,” the company said in a statement here.
A Mumbai-based analyst who tracks the company said Krsnaa would not be able to offer CGHS rates in the B2C business, but one can be sure its pricing would be disruptive. “There will be an impact of diagnostic prices from other players as a result of Krsnaa’s entry into this space,” he added.
In a March report, Edelweiss noted: “Krsnaa is expected to record some of the best growth among its listed peers, driven by 10-15 percent growth in existing hubs, fueled by new projects and price increases of a single digit”.
“Furthermore, teleradiology centers allow you to reach remote locations at significantly low prices given the low cost of reporting,” added the brokerage.
The diagnostic industry is poorly penetrated in rural areas. Higher government spending and initiatives are expected to drive the PPP model faster (14-17 percent), compared to the diagnostic industry as a whole (13-14 percent).
“In addition, the influx of electronic pharmacies is ushering in a change in the dynamics of the sector. Krsnaa has an advantage here. Its attractive prices coupled with quality offerings will work in Krsnaa’s favour,” said Edelweiss.
Chief Operating Officer Ravinder Sethi said: “Currently, we operate most of our centers through hospitals… With this launch, we are reaching out to patients to ensure we are present in places where there is unmet healthcare need. Krsnaa Diagnostics is one of the largest diagnostic players offering disruptive competitive pricing to its customers.”